26 February 2013
RE: Mandatory Use of Turkish Language
This Memorandum aims to provide brief information on (i) provisions and restrictions imposed by the Law on Mandatory Use of Turkish Language by Economic Enterprises numbered 805 and dated 10 April 1926 (the “Law No. 805”) on Turkish and foreign enterprises; (ii) consequences of non-compliance with the Law No. 805; and (iii) application of the good faith principle in the light of the precedents of the Turkish Supreme Court of Appeals (the “Court of Appeals”).
A. SCOPE OF THE LAW NO. 805
The Law No. 805 is applicable to all Turkish and foreign enterprises with respect to transactions listed in Articles 1 and 2 of the Law No. 805; however, application of the Law No. 805 differs depending on the nationality of the enterprise.
1. Turkısh Enterprıses
In accordance with Article 1 of the Law No. 805, “Any type of companies and enterprises which have Turkish nationality shall use Turkish language in all kinds of transactions, agreements, correspondences, accounts and books within Turkey”. According to Article 1 of the Law No.805, each company and enterprise a the Turkish nationality is obliged to keep any kind of transaction, records and books and execute all agreements and make all communications with each other in Turkish language within the territory of Turkey. Accordingly, the only exclusion for the obligation of the use of Turkish language in transactions and communications of Turkish companies and enterprises is the case where such transactions and communications are executed/performed outside the territory of Turkey. In that respect, it is clear that an agreement to be executed between two or more Turkish companies should be prepared and signed in Turkish language, or if it is preferred to be executed in a foreign language, to be accompanied with a Turkish version which shall prevail in the event of discrepancy. There are several court decisions in this...