Foreign Investment Loss: Istanbul Appeal Court 2025/1699 Ruling

In investment fraud cases the hardest question is often not "who is right?" but "where, and under which law, will this claim be pursued?" Suppose the money was collected in one country, the company went insolvent there, and the manager faced criminal proceedings there, yet the manager's assets and address turn up in Türkiye. Can the investor start enforcement proceedings in Türkiye? How much weight does an insolvency table drawn up by a foreign court carry before a Turkish court? When more than ten years have passed, under which country's rules is the limitation period calculated? In a case arising from a bond investment in a renewable energy holding founded in Germany, the 14th Civil Chamber of the Istanbul Regional Court of Appeal answered all three questions.

By its decision of 22.10.2025, Docket No. E.2022/460, Decision No. K.2025/1699, the 14th Civil Chamber of the Istanbul Regional Court of Appeal unanimously dismissed on the merits the appeals of both parties against the first-instance judgment cancelling the objection for EUR 26,386.54 in principal and EUR 9,997.57 in accrued interest. The Chamber accepted that German law applies to the substance of the dispute under Article 34 of the Turkish Private International Law Act (MÖHUK), that a German insolvency table bearing an apostille is an official document in Turkish law, and that the limitation period is also determined under German law pursuant to Article 8 of MÖHUK.

☀️ From a solar energy bond to an enforcement case in Türkiye

The facts reflected in the decision show step by step how a cross-border investment scheme was unravelled. The claimant is one of the investors who bought bonds issued by a German holding company for renewable energy and solar energy investments. According to the claimant, the company collected close to EUR 45 million from many people, the claimant among them, and the money was taken out of the company account through transactions such as the purchase of works of art. The chronology set out in the decision is as follows:

The defendant argued that the claim should have been directed at the company, that the competent court was in Germany, that the claim was time-barred, that no action could be brought in Türkiye before foreign judgments were recognised and enforced, and that, because of the territoriality principle of insolvency, no proceedings could be held in Türkiye.

🧭 From lack of jurisdiction to appeal: the long road of the case

The action was first filed before the Istanbul 27th Civil Court of First Instance, which dismissed it on procedural grounds by a judgment of 12.02.2019 for lack of jurisdiction; the appeal against that judgment was finally rejected by a decision of the same Chamber dated 03.06.2020. The case was then sent to the Istanbul 21st Commercial Court of First Instance.

By its judgment of 24.11.2021, Docket No. 2020/256 E., Decision No. 2021/885 K., the Istanbul 21st Commercial Court of First Instance partly accepted the action. Under the ruling, the objection was cancelled for EUR 26,386.54 in principal and EUR 9,997.57 in interest accrued up to the enforcement proceedings; interest on the principal was to run as stated in the proceedings under Article 4/a of Law No. 3095, the excess claim was rejected, and an enforcement denial compensation of 20%, amounting to TRY 44,927.34, was ordered. The court accepted that the enforcement office and the court had jurisdiction because of the defendant's address and assets in Türkiye.

Both parties objected to the judgment. The claimant asked for pre-enforcement interest to be calculated under Law No. 3095 instead of German statutory interest; the defendant asked for the judgment to be set aside on jurisdiction, limitation, standing to be sued and the merits.

🌍 Which country's law? Article 34 of MÖHUK and the lex fori distinction

The Chamber first characterised the dispute as a private law dispute with a foreign element. Since Türkiye is not a party to any international convention on the matter, the applicable law was determined under Law No. 5718 on Private International and Procedural Law (MÖHUK). The reasoning of the decision in this part can be summarised as follows:

• Characterisation: The action is a tort liability claim brought by a person who invested in the company against the manager, who is alleged to have used the money collected for purposes outside the company's business.
• Law applicable to the merits: Under Article 34/1 of MÖHUK, obligations arising from a tort are governed by the law of the country where the tort was committed. As the act was committed in Germany, German law applies to the merits. Under Article 2 of MÖHUK, the judge applies the competent foreign law ex officio.
• Law applicable to procedure: The characterisation of the action, procedural objections, the rules of evidence and interim stages of provisional legal protection such as precautionary attachment are governed by the law of the judge (lex fori), that is, Turkish law.
• Basis in German law: As the German Stock Corporation Act has no special provision on actions brought directly by third parties against members of the management board, such actions are decided under the general tort provision in Article 823 of the German Civil Code.

The Chamber also noted that the counterpart of the same claim in Turkish law is the liability of the manager, and that this liability can be based both on the special provisions of the Turkish Commercial Code (TTK) and on the tort provisions of the Turkish Code of Obligations (TBK). According to the Chamber, the focus of the dispute was not the existence or the amount of the money, but whether the manager can be held personally liable for money paid into the company.

📑 The evidential value of a foreign insolvency table

The part of the decision most likely to matter in practice is the value given to the insolvency table drawn up by the German insolvency court. The Chamber assessed the document as follows:

An important distinction arises here: the defendant argued that no action could be brought in Türkiye without going through the recognition and enforcement procedure for the foreign judgment. The Chamber, however, did not enforce the document as if it were a judgment; it treated it as evidence in a claim action heard by a Turkish court. Enforcement (tenfiz) is the route required for a foreign judgment to be executed directly in Türkiye; the present action, by contrast, is a re-examination of the claim before a Turkish court, and the foreign document serves as a means of proof in that examination.

A different angle on the legal nature of a payment made by an investor to a scheme set up abroad is addressed in the same series, in the decision of the Court of Cassation 11th Civil Chamber 2025/6940 on the distinction between partnership and claim for investors abroadTR. For the Turkish insolvency law side of registration in the insolvency estate, the 6th Civil Chamber decision 2026/1764 on a eurobond holder's action for registration in the insolvency estateTR can also be reviewed.

⏳ The thirty-year limitation period and four per cent interest

Limitation was one of the defendant's strongest defences: it was argued that the claim arose in 2005 and that a long time had passed by the date of the action. In Turkish law, the limitation period for torts is set out in Article 72 of the TBK as two years from the time of learning of the act and in any event ten years from the act. The Chamber, however, did not apply these periods, because:

• Under Article 8 of MÖHUK, limitation is governed by the law applicable to the substance of the legal transaction and relationship. As German law applies to the merits, limitation is also determined under German law.
• Under Article 197/5 of the German Civil Code, claims established within an insolvency procedure are subject to a thirty-year limitation period.
• Because the claimant's claim is entered in the table in the finalised insolvency case, it falls within this scope, and the thirty-year period had not expired on the date of the enforcement proceedings and of the action.

The same reasoning was applied to interest. The claimant had asked for the highest interest rate applied by state banks to deposits under Turkish rules, from the date of entry in the insolvency table. The Chamber stated that, because German law applies to the merits, interest must also be determined under German law; that under Articles 849 and 246 of the German Civil Code the statutory interest is 4% per year; and it found correct the expert's calculation of EUR 9,997.57 in accrued interest at this rate. In this assessment reference was made to the decision of the Court of Cassation 11th Civil Chamber dated 09.07.2025, Docket No. 2024/6622 E., Decision No. 2025/5005 K.

⚖️ Does the course of a foreign criminal case stop the civil case?

The defendant argued that the German Federal Court of Justice had quashed the conviction and that the criminal case against him was later stopped. The Chamber answered this defence on three points:

• According to the passages set out in the decision, the Federal Court's reasons for quashing mainly concern how, and by which method, the investors' loss is to be calculated. The Chamber set out the content of the quashing decision in detail, but in reaching its result it relied on the material facts established in the criminal proceedings.
• The document showing that the criminal case was stopped on 05.07.2022 was submitted at the appeal stage and does not bear an apostille.
• According to the material facts established in the criminal proceedings, the investment money was consumed for purposes outside the business within the defendant's organisation; assessing these facts is sufficient for tort liability, and the outcome of the criminal case will not affect the present action.

In Turkish law too, under Article 74 of the TBK, the civil judge is not bound by an acquittal given by the criminal judge. The question of suspending a civil case pending a criminal case is discussed on a different set of facts in the series decision of the 4th Civil Chamber 2025/15864 concerning a compensation action against a person who let others use their accountTR.

🔎 What the decision shows for investors

What the decision shows for investment disputes arising abroad can be listed as follows:

❓ Frequently Asked Questions

For detailed information and legal support, you can contact Savun Law & Consultancy. Contact details are on the contact page, and the other decisions in the series are in the Precedent DecisionsTR section.