ERDEM-NEWSLETTER-2018-metin

5 COMMERCIAL LAW The right of a pledge under Turkish Civil Code Article 956 de- pends on different principles according to whether the certificate is a bearer share certificate or a registered share certificate. Bearer Share Certificates. The rule in Turkish Civil Code Article 956/1 applies to the pledge of bearer share certificates: delivery of certificates to the pledged creditor is sufficient for the pledge of bearer share certificates. The act of disposal consists of a transfer of possession and in rem contract. According to Article 939/3 of the Turkish Civil Code, a right of pledge is not borne so long as the movable is under the sole control of the pledger. Thus, transfer of possession to the creditor must end the sole possession of the pledger on the share certificate. Under Article 647 of the Turkish Commercial Code (“TCC”), in order to establish ownership or a limited real right on a negotiable instru- ment, the transfer of its possession is necessary. Transfer of the posses- sion of the pledged movable provides for the publicity of the right of pledge. Alignment of declaration of consents regarding the purpose of establishing a pledge by transferring the possession of the bearer share certificates constitutes the in rem contract. The in rem contract here is not subject to any form requirements; it can be concluded explicitly or implicitly. The right of pledge is established when the conditions for the in rem contract and transfer of possession are satisfied. The parties may also establish a pledge by adopting a method such as disposition or endorsement and delivery, although it is not required. In the event that someone, who is not owner of the bearer share certificates, entitles the pledged creditor the right of pledge on these certificates, the good faith of the pledger who is in the position of a third party shall be protected in accordance with Article 990 of the Turkish Civil Code. Registered Share Certificates. Two options are available under Article 956/2 of the Turkish Civil Code: (i) concluding a written pledge contract and delivery of registered share certificates (Turkish Civil Code 955/1); or (ii) endorsement and transfer of the registered share certificate (Turkish Civil Code Article 647/2; TCC Article 689/1) is required. Here, delivery means transfer of possession.