ABSTRACT
The trustee is the person assigned to manage a certain property or to perform a certain job. In legal terms, “a trustee” is defined as a person appointed for the administration of a certain good company or a foundation or for negotiation of a certain business. Nowadays “appointing a trustee” is heard more often as it is becoming a more common method for companies that are the most important players in the modern-day free market economy. In our study, “a trustee who is appointed in some cases upon the request of the concerned, in some cases by the judge” shall be analyzed in accordance with the regulations of the Turkish Commercial Code, Turkish Civil Code and Execution and Bankruptcy Law and the provisions of the Turkish Penal Procedure Code shall be analyzed only for the management trustee. “Controlling trustee” provisions are excluded.
I. INTRODUCTION
A trustee is defined as a person appointed for the administration of a certain good or a company.1 The term trustee is of Arabic origin and has many meanings, for example, to perform, carry out, work, see, and to be fulfilled. In legal terms, “a trustee” is defined as a person appointed upon the request of the relevant person, or upon the request of a judge or probation officer2 for the administration of a certain good, company or foundation, for the transaction of business or management of assets. In other words, a “trustee who has the status of legal representative is a person appointed for the administration of a certain good or transaction of business. Hence, a trustee is a person tasked to assist in the interest of one or several persons by the administration of their property or by giving their consent and giving their consent in that administration in Roman Law.3 The reason for the appointment of a trustee is to prevent damage to the assets of the persons. In Islamic Law, a trustee is appointed for absentee persons. In this situation, the duty of the trustee is protecting the assets of the absentee, collecting the receivables and fulfilling their debts4.
In our study, the provisions regarding trustee, which are regulated in Turkish Civil Code number 4721, Turkish Commercial Code No. 6102 and Execution and Bankruptcy Law No. 2004, will be analyzed. Within this scope, firstly general information about the trustee institution shall be evaluated, then the conditions of the appointment of a trustee shall be discussed.
II. THE CONTEXT OF TRUSTEE IN LAW
A. Legal Character of Trustee and Trustee Institution
1. The Trustee in Turkish Civil Law
According to the Articles of Turkish Civil Law No. 4721 (“Law No 4721”), a trustee is a tutelage organ appointed by tutelage authorities for transaction of business or administration of assets.
Appointment of a trustee is the lightest but the most practicable of the other guardianship measures stipulated by Law No 47215. Due to the fact that the trustee does not have general representative authority, the limits of his/her duties and authorities should be determined within the limits of the specific job and these limits cannot be exceeded by the trustee. The duty of the trustee to perform other works is subject to the permission of the court that appoints him/her or shall be subject to the special authority by the person who is represented.
We can say that the provisions on tutorship are a bit disorganized in Law No. 4721. The provisions related to trustees are divided into three parts in the tutelage section. Furthermore, some provisions of guardianship are also adopted to be applied to trustees by comparison. Provisions regarding guardianship can be applied for trustees if those clauses do not exceed the limits drawn by the law in terms of trustees.
The title of representative trustee ends on completion of the assigned work. The title of management trustee ends with the dismissal of the reason for the appointment of the trustee or the dismissal of the trustee.
2. The Trustee in the Turkish Commercial Code
According to the Articles of Turkish Commercial Code No. 6102 (“Code No.6102”), provisions regarding trustees are limited. In addition, the first Article of Code No.6102 is regulated as “The Turkish Commercial Code is an integral part of the Turkish Civil Code numbered 4721 dated 22/11/2001”. Thus the legislator does not need to include separate provisions on the appointment of trustees in Code No. 6102 to avoid any confusion due to duplication. That provides an opportunity to apply the relevant provisions of Law no. 4721. As a matter of fact, in practice, the appointment of trustees to companies is demanded and decided in accordance with the provisions of Law No. 4721.
3. The Trustee in Execution and Bankruptcy Law
Although the general arrangements of trustees are implemented by Law No. 4721, additional provisions have been regulated by force of the changes in Execution and Bankruptcy Law in 2003. This change was related to the annulled suspension of bankruptcy institution, which was abolished in 2018. According to the provisions regarding the suspension of bankruptcy, the appointment of a trustee is regulated. In the context of crimes committed within the framework of a company’s activity, the determination of the trustee in the management of the company has been a very appropriate arrangement in order to prevent damage to the public economy while interfering with the company.
4. The Trustee in the Law of Criminal Procedure
The appointment of a trustee for company management entered into Turkish Law with the Articles of the Law of Criminal Procedure No. 5271 (“Law No 5271”). When the importance of companies in economic and social life is considered, interventions which will be made to the companies must be treated with great precision. Until 2015, appointing a management trustee was almost never seen in the management of a company within the scope of investigations, especially after the 15 July 2016 coup attempt. It became widespread with the appointment of a trustee in accordance with Law No. 5271.
In civil law, a regulation similar to the “trustee” provisions regulated in Law No. 5271 is included in “Suspension of Bankruptcy” provisions with the amendment to Law No. 2004 mentioned above.
We can evaluate the legal character of the “appointment of a trustee for administration, which is regulated in Law No. 5271 as a special seizure type6.
Two types of trustee are regulated in Law No 5271: a control trustee and a management trustee. At this point, the method followed by the legislator is confusing, because in the relevant Article of Law No.5271, both “control trustee” and “management trustee” are regulated. Therefore, if the court has established and concretely justified the existence of the conditions sought in the Article of law No. 5271, the court may decide to appoint a management trustee or a control trustee.
III. THE CONDITIONS OF THE APPOINMENT OF A TRUSTEE IN CIVIL LAW
According to Law No. 4721, if a mature person is not able to realize an urgent job for him or herself because of disease, absence, or for any other reason, or to appoint a representative, or if the interest of the statutory representative is in conflict with the interests of the minor, or if the legal representative is an obstacle to performing his duties, or in other cases indicated in the law, the Magistrates’ Court appoints a representative trustee upon the request of the relevant person or through its own judgment (Article 426).
A management trustee may be appointed by the guardianship authority in order to take necessary measures for goods that are not owned by anyone, or where no one has been found for a long time and his residence is unknown, if there is no sufficient reason to be placed under guardianship or if they are deprived or if their rights to inheritance are not certain or if the interests of the fetus are required. Except in these cases if a legal entity is deprived of the necessary bodies and its management has not been provided by any other means, and the way to manage money or other aid collected from the public for another job or a benefit for general benefit is not provided or if the means of expenditure cannot be provided a management trustee could be appointed (Article 427).
Furthermore, a trustee could be appointed on his/her own request in the event of one of the reasons for optional restriction (Article 428).
The Article 429 of Law No. 4721 stipulates the rules on the “Legal Consultancy” Institution. The term “partial ability” has been revise to “legal consultancy” within the current law. Even if there is not enough reason to restrict a person, a legal advisor may be appointed to give opinions in terms of protection of a person who has the legal capacity to exercise civil rights, including suing and settlement, purchase and sale of immovable, pledge, establishing other real rights, purchase and sale of valuable documents, pledge of construction outside the boundaries of ordinary management, lending and receiving, receiving the main money, donation, exchange authorization.
The representative trustee shall be appointed by the Magistrates’ Court, which is the residential guardianship authority of the relevant person (Article 430). The management trustee shall be appointed by the Magistrates’ Court, which is the custodial authority of the place where the goods of the person represented or the majority of the goods are located (Article 430). The legal advisor shall be appointed by the same court.
The rules on the appointment of a guardian shall also apply to the appointment of a trustee and legal advisor (Article 431/1). However, the announcement is not mandatory for this process. The court decision on the appointment of a trustee or legal advisor shall be announced by the Magistrates’ Court when it is deemed necessary (Article 431/2). In case the appointment is declared or the court deems it necessary, termination of the appointment shall also be announced.
IV. THE APPOINTMENT OF A TRUSTEE FOR THE ADMINISTRATION OF A COMPANY AS A MEASURE OF PROTECTION OF EVIDENCE
A company may be a joint venture established under the Turkish Code of Obligations, or may be a collective, limited, joint stock or limited liability company. The company’s shareholding structure and who establishes it is not important, even a public partnership can be found in the company. To determine the legal nature of the trustee appointed to the company’s management, it is important to decide whether the trustee is appointed as the approval authority or the governing body. As mentioned above, there are two types of trustees regulated as protection measures in Law No. 5271.
In the event that the trustee is appointed as the authority of approval, the validity of the decisions and transactions of the company’s governing body shall be subject to the approval of the trustee and in this case, the authority to make decisions and transactions continues to be with the governing body of the company. The trustee only acts as an approval authority for these decisions and for procedures to be valid. It has no effect on the decisions taken and the transactions made.
It is very difficult to say that the control trustee is a complete trustee, because the trustee is assigned to manage a particular property or to perform a particular job. In this context, the representation and management aspect of the trustee comes to force. Since the control trustee does not have the ability to represent and manage the company, we can say that its legal character is more akin to a vote advisor, which is a sub-branch of the legal consultancy regulated in Law no. 47217.
We may consider the legal nature of the trustee as a management trustee instead of the governing body or the authority of the governing body, for a trustee appointed to manage the instruments of a company8. In the event of appointing a trustee as a governing body, the position of the governing body shall end with the appointment of the trustee. In such cases, all powers of the governing body shall be registered to the trustee.
The requirements for the appointment of a trustee for the management of a company are quite strict compared to the requirements of private law. The legislator sought the same precondition for both the control trustee and the management trustee. This requirement is a strong reason for suspicion that an offense is being processed within the framework of an activity of a company in the prosecution process, and started with the adoption of the investigation or indictment initiated against at least one of the crimes listed in the law. However, it may not be possible to apply this protection measure for every crime. This protection measure shall only be applicable to the catalog offenses specified in Law no. 5271. It may not be possible to appoint a trustee in company management for offenses other than those crimes.
Considering the aim of the appointment of a trustee, it is concluded that this measure should first be applied in the investigation phase. After the investigation, company executives may attempt to liquidate the company’s assets. In this case, the decision to be made as a result of the trial will remain on paper and the creditors of the company shall be in danger of falling into the situation. Therefore, it would be best to apply this measure as soon as the investigation phase is started.
The authority to decide on the appointment of a trustee in the investigation stage lies only with the magistrates. The magistrate of the magistrates shall decide on the appointment of the trustee upon the request of the prosecutor. In the prosecution phase, the court shall decide on the appointment of the trustee to the company management. The court which decides to appoint a trustee to the management of the company shall determine the authority of the trustee on the second stage.
There is no clarity in the law on the tenure of the trustee. However, the fact that the legislator has not provided a provision regarding the tenure of the appointed trustee cannot be interpreted as a deficiency since the appointment of the trustee is a measure. This measure shall have to be terminated if the expected benefit shall not be realized by the implementation of this measure. The provisional nature of protection measures may lead to this conclusion.
V. CONCLUSION
Regulations concerning the “trustee institution”, which dates back to Roman Law, are included in the Turkish Civil Code number 4721 in general. A trustee is a custody body appointed by the guardianship for transaction of business or to manage assets. As mentioned above, the trustee institution has a different context in some laws. In some cases, the trustee is appointed by the judge and in some cases upon the request of the person concerned. In other cases, if the trustee is appointed for a specific job, the boundaries of the duty and authority are determined by this job. In this context, it may not be possible for the trustee to carry out works other than those assigned.
In the period prior to the adoption of the “trustee institution” to the management of the company, the management and representation of the company could not be realized in the process initiated with the claim that a crime has been committed within the framework of the company’s activities. As a result, neither the company’s debts could be paid, nor the receivables could be collected. In order to prevent these inconveniences, the trustee institution is accepted in the Code of Criminal Procedure and the conditions for the seizure of the company management are stipulated as a type of protection measure.
BIBLIOGRAPHY
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FOOTNOTE
1 (Türk Dil Kurumu Büyük Türkçe Sözlük, www.tdk.gov.tr).
2 Kayar, İ. (2007) İflasın Ertelenmesinde Kayyımlık”, Hüseyin Ülgen’e Armağan, Cover II: 1905-1928. İstanbul: Vedat Kitapçılık.
3 Güneş-Ceylan, Seldağ, “Roma Hukuku’nda Kayyımlık (Cura) Müessesesine Genel Bir Bakış”, AÜHFD, Cover: 53, Number:1, p.221- 222.
4 Ansay, Sabri Şakir, Hukuk Tarihinde İslam Hukuku, Cover:4, Ankara 2002, p.74-76.
5 Gümüş, Mustafa Alper, Türk Medeni Hukukunda Kayyımlık, İstanbul 2006, p.1.
6 Öztürk, Bahri/Tezcan, Durmuş/ Erdem, Mustafa Ruhan/Sırma, Özge/Kırıt, Yasemin F. Saygılar/ Özaydın, Özdem/Akcan, Esra Alan/Erden, Efser, Nazari ve Uygulamalı Ceza Muhakemesi Hukuku, Cover:9, Ankara 2015, p.509.
7 Bilge Öztan, “Kanuni Müşavirlik ve Federal Mahkeme’nin Bu Konuya İlişkin Görüşü”, Ankara Hukuk Fakültesi 50.Yıl Armağanı, C.I, Ankara 1977, p.298.
8 Gümüş, Kayyımlık, p.129; Güralp, Ayşe Gülin, Anonim Şirkette Kayyım, İzmir 2005, p.10 (Yayımlanmamış yüksek lisans tezi).
