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Legal Issues on Implementation of Article 18(2) of CO (Article
19(2) of TCO) Regarding the Simulation
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Att. Suleyman Sevinc
Introduction
The simulation is stipulated within Art. 19 of the new Turkish
Code of Obligations numbered 6098 (“TCO”) which shall enter into
force on 01.07.2012 and within Art. 18 of the Code of Obligations
numbered 818 (“CO”). Pursuant to these two similar provisions, for
assessing the form and terms of a contract, the true and common inten-
tion of the parties must be ascertained without dwelling on any inexact
expressions or designations they may have used either in error or by
way of disguising the true nature of the agreement. The simulated
transactions shall be null and void. However, the issue to be discussed
within this article is neither the notion of simulation nor the sanctions
in case of simulation; an attempt to explicate the literal meaning and
intended meaning -purpose- of Art. 18/2 of CO and Art. 19/2 of TCO
shall be made herein this article.
Art. 18(2) of CO and Art. 19(2) of TCO
Pursuant to relevant articles, which are the same in their intended
meanings but inscribed differently, a debtor may not plead simulation
as a defense against a third party who has become his creditor in
reliance on a written acknowledgment of debt issued by the debtor.
However, there are some points, which are misinterpreted and misap-
plied within these relevant articles.
For implementation of this article, there must be a written
acknowledgement of debt between the parties and this debt must be
null because of simulation (fraudulent transaction). Subsequently, the
debt arising from acknowledgement of debt subject to simulation must
be assigned to a bona fides third party. Therefore, the fraudulent trans-
action between debtor and creditor should be the main relation and
main transaction and not the assignment of receivable.
LAW OF OBLIGATIONS
269
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Article of March 2012