Constitutional Court Decision from the Judiciary
Official titleDecision of the Constitutional Court Dated 16/4/2026 and Numbered E: 2025/249, K: 2026/79
The Constitutional Court has unanimously decided that the statutory provision stipulating that the court shall "render an immediate temporary moratorium decision" in the event that the required documents are fully submitted in a composition with creditors (concordat) request is not unconstitutional, and rejected the objection.
Details of the Regulation
The 1st Commercial Court of First Instance of Ankara Batı submitted an application for annulment on the grounds that the phrase "...shall render an immediate temporary moratorium decision..." in the first paragraph of Article 287 of the Execution and Bankruptcy Law No. 2004 eliminates the judge's discretionary power, and impairs the independence of the courts and the freedom to claim rights. In the application, it was argued that the judge cannot refrain from granting a moratorium even against bad-faith debtors who submit the required documents, which in turn violates the creditors' right to property.
In its examination on the merits, the Constitutional Court determined that, by its nature, the temporary moratorium decision is a temporary and protective measure that must be taken rapidly. It was stated that there is no constitutional obstacle to the legislature narrowing the judge's discretionary power at this stage requiring urgent intervention by binding it to objective criteria (the completeness of the documents) in order for the process to proceed rapidly.
In the reasoning of the decision, it was emphasized that in cases where it is understood during the temporary moratorium period that the debtor has acted in bad faith or that the composition with creditors cannot succeed, the court has the authority to revoke the moratorium and issue a bankruptcy decision, and therefore control mechanisms protecting the property rights of creditors exist within the system. On these grounds, it was decided that the rule does not violate Articles 5 and 35 of the Constitution, and the objection was unanimously rejected.
Questions You Might Have
- Why is the court obliged to grant a moratorium without conducting a detailed examination if the documents are complete?
- Because the temporary moratorium is an urgent and temporary measure. It is intended for the system to provide automatic protection at the initial stage without bureaucratic delay in order to prevent the debtor's assets from being rapidly plundered by creditors.
- If the debtor acts in bad faith and strips the assets of the company, will creditors be left helpless?
- No. The law grants the court the authority to immediately revoke the moratorium and declare bankruptcy upon the report of the temporary administrator or the request of the creditors, if it is understood that the debtor is acting in bad faith or that the composition with creditors cannot succeed.
Key Terms
- Konkordato
- A legal institution that enables debtors who are unable to pay their debts when due or who are under the threat of being unable to pay them to restructure their debts by agreeing with their creditors.
- Geçici Mühlet
- A temporary protection period, usually 3 months, granted by the court upon acceptance of the composition with creditors application in order to protect the debtor's assets and stay enforcement proceedings.
- İtiraz Yolu
- The application made directly to the Constitutional Court for the annulment of a statutory provision by a local court that comes to the conclusion during the hearing of a case that the provision applied is unconstitutional.
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REGAS Commentary
This decision legally guarantees that companies in financial distress can quickly obtain a legal protective shield (the temporary moratorium) when initiating the composition with creditors process. While the court's obligation to grant a moratorium at the initial stage without conducting an in-depth examination buys vital time for debtors, and although it creates a temporary restriction for creditors, the fact that the moratorium can be revoked subsequently in bad-faith situations shows that the balance is maintained.