The Negative Declaratory Action and its Features

A negative declaratory action is a type of declaratory action filed to prove that the debtor is not indebted. In this case, it is requested from the court to determine that the claimed right or legal relationship does not actually exist. The person who is claimed to be in debt can put forward different reasons for not actually having debt. For example the debtor may claim and prove that such a debt does not exist at all, that the debt has been paid, that the bill, which is the basis of the debt, is fake or bad, and that the debtor does not actually have any debt. In this way, the debtor gets rid of the debt payment on her/him impelled by the credior.

In this bulletin, we have explained the characteristics and conditions of the negative declaratory action in general, and by whom and in which courts it should be filed.

1. Who Can File The Negative Declaratory Action?

The person who is claimed to be indebted and who is threatened to pay a debt files a negative declaratory action. If the person who is claimed to be indebted wins this case, that person proves with a final judgment that she/he cannot be held responsible for the debt demanded from her/him.

The debtor party, against whom enforcement proceedings have been issued, may file a negative declaratory action, or a person who has not yet been subject to an enforcement proceeding, but has been asked to pay the debt by the creditor through a process such as protest or warning.

Having a legal interest in filing this lawsuit of the person who can file a negative declaratory action is a cause of action. The case of the person who has filed a negative declaratory action although it has no legal benefit will be dismissed due to the procedure. Detailed explanations will be given below regarding the legal interest condition.

2. For What Reasons Can The Negative Declaratory Action Be Filed?

The plaintiff of the negative declaratory action, who wants to prove that she/he is not in debt, may claim various reasons in this regard. For example the plaintiff, whose debt is documented in one year, may claim that this bill is fake, that the bill has been falsified, that the bill is actually a windbill, that the bill was filled in violation of the agreement, that the bill was issued through threat (intimidation). The debtor must notify the court on what grounds she/he is not indebted.

3. When Can the Negative Declaratory Action Be Filed?

A negative declaratory action can be filed in the event that enforcement proceedings are issued against the alleged debtor or at the stage before an enforcement action is issued. In both cases, it is required that the debtor has a legal interest in filing this lawsuit. It is accepted as a rule that the debtor has legal interest in negative declaratory action filed after the execution proceeding is finalized. In cases of negative declaratory actions to be filed before the execution proceeding, it must be demonstrated that the debtor has a legal interest in filing this case. Here, what is meant by legal interest is a current and legal interest worthy of protection.

“If the legal situation of the debtor is in danger in the negative declaratory action filed before the proceeding, or if the legal relationship between the parties contains uncertainty and the uncertainty will be eliminated with the decision to be made as a result of the lawsuit to be filed, it should be accepted that there is a legal benefit.”[1]

If there is an action for withdrawal of appeal that is still pending, which the creditor party has filed against the debtor for the same debt, the debtor can no longer file a negative declaratory action for the determination of the absence of the same debt. Because here, the debtor has no legal interest in filing this lawsuit. The debtor must put forward all her defenses against the creditor that she/he is held liable for a debt that she/he does not have to pay, in the action for the withdrawal of appeal. Likewise, if an action for withdrawal of appeal with the same parties, subject and reason has been filed before and resulted in a final judgment, it is not possible for the debtor to file a negative declaratory action against the same creditor for the same debt. In these two cases, the lawsuit filed by the debtor is dismissed on procedural grounds due to the pendency and final judgment.

4. Where Should the Negative Declaratory Action Be Filed?

The competent court in the negative declaratory action is determined by examining the general provisions of the Code of Civil Procedure regarding duty and authority. As a rule, the competent court for negative declaratory action is the civil court of first instance (CCP art. 2). In this regard, the amount of receivables subject to litigation is not important.

Civil courts of first instance are courts of general jurisdiction, and the subject matter of the case may be within the jurisdiction of a court of special jurisdiction. For example, the negative declaratory actions pertaining to commercial cases, will be heard in the commercial courts of first instance (TCC m. 4). Again, in cases of negative declaratory actions for debts arising from the rental relationship, the civil courts of peace are competent (CCP m.4/a).

The competent court should be determined by taking into account whether the case was filed before or after the execution proceeding. Accordingly, in negative declaratory actions filed after enforcement proceedings, the competent court will be the court in charge of the defendant creditor’s domicile or the court in charge of the place of enforcement proceedings. In cases of negative declaratory actions filed before the execution proceeding, the competent court is the court in charge of the defendant creditor’s settlement at the date of the lawsuit (HMK art.6).

5. The Final Term for the Negative Declaratory Action

There is no specific time limit or statute of limitations for negative declaratory actions. However, there may be a final term, depending on the legal reason and the subject of the case, of the defense made that there is no debt in the case. Therefore, this issue should be evaluated differently in each case.

6. The Impact of the Negative Declaratory Action

“The negative declaratory action, which is a special form of the declaratory action regulated in Article 106 of the CPC, cannot be qualified as a claim for receivables and compensation, the subject of which is the payment of a certain amount of money. As a result of this lawsuit, if it is understood that the debtor is not a debtor, a negative declaratory provision is established by specifying the part that is not owed.”[2]

Since the negative declaratory action is a lawsuit heard in general courts in accordance with general provisions, the decision rendered in this lawsuit constitutes a final judgment in material terms. This means that it is not possible to file a new lawsuit on the same subject and between the same parties regarding the same debt.

The effect of the negative declaratory action also varies depending on when the case is filed. Negative declaratory actions filed before the enforcement proceedings cannot prevent the issuance of an enforcement action against the debtor related to the same debt later on. It is possible to issue enforcement proceedings without judgement against the debtor regarding the debt in question. However, if the debtor makes a request from the court, she/he may request an interim injunction to suspend the enforcement proceedings against her/him in return for the guarantee to be deposited.

If the debtor files a negative declaratory action after the enforcement proceedings have been issued, the enforcement proceedings issued against her/him do not halt with the filing of this lawsuit, but continues. Here, the debtor cannot ensure that the enforcement proceedings against her/him are halted in return for the guarantee. Only the last stage of the execution proceeding, the money in the execution cashier can be prevented from being paid to the creditor. Therefore, while the negative declaratory action is pending, the debtor’s property may be seized and sold by continuing the enforcement proceedings against the debtor at the same time. Here, the debtor can prevent the money obtained as a result of the sale in return for collateral from being paid to the creditor or creditors by the enforcement office. In addition, if the debtor, who has taken an interim injunction decision regarding the non-payment of the money to the creditor before the final stage of the enforcement proceedings, wants to prevent the seizure and sale of the goods, he/she will have to pay the enforcement office the amount of cash that will cover the entire receivable, together with the proceeding expenses and interest.

7. Charges in the Negative Declaratory Action

Fees are proportional in negative declaratory actions; that is, the subject of the lawsuit is determined according to the debt. The amount of the fee is the amount obtained by calculating 68.31 per thousand of the debt. This amount must be deposited while filing the lawsuit.

In a Supreme Court decision, it is stated as follows that the negative declaratory action brought against the third attachment notice is subject to fixed fees;

“The lawsuit is a negative declaratory action against the third attachment notice sent pursuant to article 89/3 of the EBL and is subject to fixed fees.”[3]

Conclusion

The debtor who wants to have it determined that she/he is not indebted should file a negative declaratory action in the competent court. Negative declaratory action can be filed  before the enforcement proceedings or after the enforcement proceedings are issued. In the negative declaratory action, the enforcement proceedings issued against guarantee may be suspended or the money obtained from the sale may be prevented from being paid to the creditor.

For more information on negative declaratory action, you can visit other relevant content on our site or contact our team.

Best Regards.

Solmaz Law and Consultancy Team.

References

KURU, Baki, (2016), İcra ve İflâs Hukuku, Legal Yayıncılık, s. 144-153.

PEKCANITEZ, Hakan/ATALAY, Oğuz/SUNGURTEKİN ÖZKAN, Meral/ÖZEKES, Muhammet, (2015), İcra ve İflâs Hukuku Ders Kitabı, Yetkin Yayıncılık, s. 173-179.

15th Civil Chamber of the Supreme Court, 2021/1131 E., 2021/2924 K.

11th Civil Chamber of the Supreme Court, 2020/2891 E., 2021/4366 K.

11th Civil Chamber of the Supreme Court, 2020/3103 E., 2021/4193 K.

[1]15th Civil Chamber of the Supreme Court, 2021/1131 E., 2021/2924 K.

[2]11th Civil Chamber of the Supreme Court, 2020/2891 E., 2021/4366 K.

[3]11th Civil Chamber of the Supreme Court, 2020/3103 E., 2021/4193 K.