PAST AND PRESENT OF THE ULTRA-VIRES PRINCIPLE IN TURKISH COMPANIES LAW

Abolished Commercial Code No. 6762 art. 137 limited the entitlement of commercial companies to the “subject of activity” included in the company's articles of association. Transactions exceeding the scope of operation written in the company's articles of association were deemed to be ultra vires transactions and were deemed null and void. Since the transactions that were deemed null and void were not available in the legal world, it was not possible to make them valid again. Because, a legal transaction that does not exist is invalid from the very beginning; even if the interests of all parties require it, it is not possible to validate the transaction with approval or authorization. Therefore, since transactions outside the scope of business of commercial companies were also considered null and void, there was no approval or ratification procedure that could make them valid. The only way to carry out the aforementioned transaction in a valid manner was to change the articles of association, regulate the company's field of activity to include the aforementioned transaction, and re-do the transaction from the beginning. In the Turkish Commercial Code no. 6102 art. 125 provision emphasized that commercial companies have legal personality, as in article 137 of the abolished Commercial Code no. 6762. However, unlike the abolished one, by eliminating the ultra vires principle, which is a limit to the competence of commercial companies. It has been widely accepted in the meaning of Turkish Civil Code art. 48. This issue was also included in the Turkish Commercial Code no:6102 art. 125 justification, and it was stated that the ultravires principle was abolished. Therefore, it is understood that the ultravires principle was abandoned as a result of the conscious choice of the Lawgiver. The subject of business is no longer a limiting element of the legal capacity of commercial companies. Despite this, the subject of business still maintains its importance for trading companies. Turkish Commercial Code no:6102 art. 213, which regulates the mandatory elements of the articles of association of commercial companies, in the provisions of 339 and 5 76, the subject of activity continues to maintain its place as a mandatory element that should be included in the articles of association. In the aforementioned provisions, among the mandatory elements to be included in the articles of association, as a common expression in the aforementioned company types, the phrase "business subject in a specified and defined manner" is used. The subject of operation is also in the Turkish Commercial Code no. 6102 art. 233 and in the provisions of art. 371, it remains as a factor limiting the representation authority of those authorized to represent the company. When these provisions are evaluated, it is understood that although the ultra vires principle has been abandoned in terms of the competence of commercial companies, the principle continues to be preserved in terms of representation. In the study, the provisions of abolished Commercial Code no:6762 art. 137, which limits the license of commercial companies to the subject of activity and art. 128, which defines the license in the broadest sense, were determined as the starting point, and the provisions regulating the authority of representation of commercial companies were examined. Thus, the effects of the ultra vires principle on the competence and representation of commercial companies have been comparatively examined within the framework of the abolished Commercial Code No. 6762 and the current Turkish Commercial Code No. 6102.

Part 2 National and Regional Reports, Part 2.4 Europe: Coordinated by Thomas Kadner Graziano, 49 Turkey: Turkish Perspectives on the Hague Principles

This chapter explores Turkish perspectives on the Hague Principles. The content of Turkish Private International Law is highly comprehensive. In addition to choice of law and international procedural law, it also covers nationality law, as well as the law on foreign nationals. Private international law rules and issues regarding international procedural law are codified in Law No 5718 on Private International Law and Procedural Law (PILA), which has been in force since 2007. Besides the PILA, the Turkish Commercial Code contains conflict of laws rules regarding bills of exchange, checks, and promissory notes. According to Article 1(2) PILA, the application of international treaties ratified by Turkey takes priority over the application of PIL rules. Consequently, in each case, the court, before taking into account PILA’s Articles, has to determine whether any international treaty exists regarding international commercial contracts. If an international treaty exists, then it takes priority unless otherwise expressed in the treaty itself. For the time being, the Turkish Parliament has no intention to revise the PILA and supplement it with the Hague Principles.

THE TURKISH AND AZERBAIJANI LAWS ON UNFAIR COMPETITION VIA STANDARDISED TERMS OF CONTRACT - ASSESSMENTS AND SUGGESTIONS

This paper presents a comparative analysis between Turkish and Azerbaijani law systems and it attempts to evaluate whether the usage of standardised terms of contract in a way that causes the infringement of the principle of good faith forming unfair competition. Standardised terms are pre-prepared without negotiating with the other contracting parties. The paper highlights that the two countries have strong connections, especially in economic and commercial terms which render even more important convergence of legal regulations. In this respect, upon examining the regulations on standardised terms and unfair competition and considering the fact that the two systems have similar approaches regarding standardised terms, the paper suggests that the usage of standardised terms in a manner that violates good faith should be qualified as unfair competition under Azerbaijani law in accordance with Article 55/1(f) of the Turkish Commercial Code. The paper assesses the issue in conjunction with the Turkish Commercial Code, Turkish Code of Obligations, the Civil Code of Azerbaijan (Mulki Mecelle) and Code on Unfair Competition. The scope of the protection that is envisaged in the relevant Turkish and Azerbaijani codes is studied from consumers’ and merchants’ aspects, respectively. The paper inter alia assesses that protecting all market participants is the most effective way to provide market balance. The paper aims to contribute to the improvement of the economic relations of Turkey and Azerbaijan via its suggestion on harmonising the two law systems in terms of unfair competition regulations. Keywords: Banks, merchant-consumer, principle of good faith, standardised terms of contract, unfair competition. Cite as: Gunay, E. D., & Gunay, G. E. (2021). The Turkish and Azerbaijani laws on unfair competition via standardised terms of contract – Assessments and suggestions. Journal of Nusantara Studies, 6(1), 309-322. http://dx.doi.org/10.24200/jonus.vol6iss1pp309-322

The managers’ decisions submitted to the approval of the general meeting: Review of Turkish Commercial Code regulations

Article 625/2 of the Turkish Commercial Code (TCC), adapted from the Swiss Code of Obligations (Obligationenrecht 811, hereinafter referred as OR 811), allows managers to submit certain decisions and individual matters to the approval of the general meeting. This paper purports to reveal how this article could be interpreted and the regulations to be made in the agreements of limited liability companies in Turkish law. To do that, an interpretation of article 625/2 of TCC is developed. In addition, the effect of this article on the liability of the managers and the references made to articles 51 and 52 of the Turkish Code of Obligations (TCO) are explained. With a regulation added in the agreement of the company, the managers would either be required to submit or they would be free to choose to submit certain decisions and individual matters to the approval of the general meeting. Considering that the submission slows down the decision-making process and causes additional costs, granting the managers the right to choose becomes an important issue. However, the approval of the general meeting does not remove the liability of the managers. So when a lawsuit for liability is filed against managers, the approval of the general meeting may decrease the payment for compensation (articles 51 and 52 of TCO)

The role and function of the e-signature, time stamp, and e-evidence in the context of Turkish commercial law

One of the aims of the Turkish Commercial Code (TCC) is to enable digital companies to promote digital transformation. To achieve this aim, it has brought many novelties to Turkish Law. This paper explains the roles and functions of the e-signature, time stamp and e-evidence in the context of the TCC, and concludes that although the TCC promotes digital companies, further changes to the legal framework are necessary to keep up with the technological advancements. Index words: Turkish Commercial Code; digital transformation; e-signature; time stamp; e-evidence

Restriction on the Authority to Represent in Turkish Joint Stock Companies Law

Turkish Joint Stock Corporations Law is based upon Swiss Law. Turkish Commercial Code of 2012 reflects a pure reception of the rules regarding the representation of the company from Swiss Law. However in 2014, Turkish Law has confronted the enforcement of Art. 371/7 TCC, which enables restrictions on the representation authority in terms of the material and monetary scope of the transaction. This study aims to bring a critical view of this regulation and to introduce a draft for a well-directed regulation with respect to restrictions related to power of representation.

Restriction on the Authority to Represent in Turkish Joint Stock Companies Law

Turkish Joint Stock Corporations Law is based upon Swiss Law. Turkish Commercial Code of 2012 reflects a pure reception of the rules regarding the representation of the company from Swiss Law. However in 2014, Turkish Law has confronted the enforcement of Art. 371/7 TCC, which enables restrictions on the representation authority in terms of the material and monetary scope of the transaction. This study aims to bring a critical view of this regulation and to introduce a draft for a well-directed regulation with respect to restrictions related to power of representation.

Corporate Governance and Accountability in the Age of Multilevel Governance in Turkey

Corporate governance and accountability are getting more and more important both for world and Turkish economies thanks to increasing competitiveness conditions among companies. Applications of corporate governance principles can show differences from country to country. In Turkey, The Capital Markets Board issued corporate governance principles in 2003 to improve the corporate governance environment and integrate the Turkish capital market with global financial markets. The board has also adopted these principles in 2005 and made them final. The new Turkish Commercial Code is based on corporate governance principles. The new Turkish Commercial Code constitutes the legal infrastructure for corporate governance practices.