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Legal Updates in Turkish Dispute Resolution Q1/2012

Focus item in this edition: Bounced Cheques (also see Banking & Finance Q1/2012)

Bounced Cheques

In the judgment of the Court of Appeals dated September 20, 2011 (File No. 2011/9584 E., 2011/10582 K.) the argument was whether banks are subject to a prescription period of six months or 10 years for making payments in return for bounced cheques in accordance with Article 10 of the Law Pursuant to the Regulation of Payments by Cheque and Protection of Cheque Holders (Law No. 3167) which states that in case of a bounced cheque or an insufficient balance, banks are obliged to make payments to person other than the drawers of such cheques up to the amount of TL20,000. In its judgment the Court of Appeals approved the decision of the Local Court, which states that with regard to bounced cheques, banks are subject to a prescription period of 10 years for making the payment of the amount that they are legally liable for.

About Pekin & Pekin

Pekin & Pekin is a full-service Turkish law firm based in Istanbul. The Firm advises on cross-border transactions in Turkey and the region, and over the 40 years since establishment has gained broad experience in both international and Turkish law. A member of Lex Mundi, TerraLex and SEE Legal, and advisor to ISDA and ICMA, the Firm is committed to excellence and has a culture of participation and success, driving all to exceed client objectives.

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