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LAW OF OBLIGATIONS 229
genuine and true underlying agreement between the parties. As for
relative simulation, it means an agreement concluded between the parties
with the intention to conceal the real (underlying) agreement.
Consequences of the Simulated Transaction
Article 18 of TCOO, as well as article 19 of NTCOO does not clearly
set forth the consequences of the simulated transactions. However, this
legal loophole was filled by both the doctrine and the Court of Appeal
decisions.
There are different points of judicial view among the legal doctrine
concerning the consequences of simulated transactions. However, the
dominant and most widely favoured opinion is to accept the simulated
transaction as invalid or void1.
The Court of Appeal and Swiss Federal Tribunal both affirmed this
point of legal view with their several judicial decisions. As a matter
of fact, both the Court of Appeal in its decision dated 16.06.2010 and
numbered E. 2010/1-275; K. 2010/3272 and the Swiss Federal Tribunal3,
state that in the proven existence of a simulated transaction, the simulated
agreement is invalid.
In addition to the invalidity of the simulated agreement, the Court of
Appeal, in its decision dated 24.02.2010 and numbered E. 2010/6-94; K.
2010/1004 , also indicated that the concealed transaction will be valid if
the general and essential validity conditions of an agreement are fulfilled
(capacity of the parties, exchange of assents, non contrariety to public
order, etc.).
1 OĞUZMAN, K./SELİÇİ, Ö.; Eşya Hukuku (Law of Property), Istanbul 1988, p. 329 /
TEKİNAY/AKMAN/BURCUOĞLU/ALTOP; Borçlar Hukuku Genel Hükümler (General
Provisions of Law of Obligations), 7. Edition, Istanbul 1993, p. 550 et seq.
2
3 ADAY, N.; Taşınmaz Mülkiyetinin Naklinde Muvazaa (Simulation in the Transfer of
Unmovable Property), LLM Thesis, Institute of Social Sciences, Istanbul University, Istanbul
1991, p. 26 in reference to GÜNAY, M.; Roma Hukukundan Günümüze Muvazaa Kavramı
(The Notion of Simulation from Roman Law to Date) LLM Thesis, Institute of Social
Sciences, Ankara University 2007, p. 58, fn. 166, .
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