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NEWSLETTER 2013
298
Account Settlement in Execution Law
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Att. Alper Uzun
Current account is regulated in Article No. 89 of the Turkish
Commercial Code (“TCC”). According to that, it is an agreement that two
persons may request the balance that drawed up at the end of a period,
instead of paying the debts or requesting receivables separately.
Account settlement may be made when the current accounts of
companies are being closed, checked-out or confirmed reciprocally.
Companies ascertain the status of debt and credit between each other
by account settlement. This settlement is usually fulfilled by issuing a
confirmation letter between companies.
Issuing a confirmation letter causes some legal disputes in practice.
The most important being whether a confirmation letter can be considered
a valid acknowledgement of debt or not.
The Confirmation Letter
According to Article No. 94 of the TCC, a confirmation letter is
issued for the purpose of closing and reciprocally confirming corporate
current accounts, and also for settling or closing the commercial books.
As per Article No. 94/1 of TCC,
“The remaining amount is determined
at the end of every year and the party receiving the reconciliation
statement is deemed to accept it if it does not submit a written and valid
notice within one month of receipt of said statement.”
According to this
regulation, companies issue a confirmation letter and send it to the other
company that is party to the current account agreement.
The company, which issues a confirmation letter, writes the debit and
credit balance into the letter.
As it is frequently seen in practice, the company, which is a party of
a current account agreement, initiates execution proceeding based on the
confirmation letter, if it cannot gain their credits.
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Article of May 2013