I. INTRODUCTION

In today’s globalized commercial environment, large-scale and capital-intensive projects often exceed the technical and financial capacity of a single enterprise. This reality has brought Joint Venture structures to the forefront, whereby economically and legally independent undertakings combine their forces and share risks. Frequently encountered in the construction, energy, infrastructure, and services sectors, these structures are not specifically regulated under a single statutory framework in Turkish law. Nevertheless, they essentially constitute ordinary partnerships governed by the provisions of Articles 620 et seq. of the Turkish Code of Obligations (TCO) [1].

The absence of separate legal personality in joint ventures gives rise to significant procedural issues concerning standing (husumet) and the proper constitution of parties when initiating enforcement proceedings and legal actions arising from their commercial relationships with third parties. In light of the case law of the Court of Cassation (Yargıtay) and the Regional Courts of Appeal, the manner in which enforcement proceedings and litigation should be conducted against such structures is examined below.

II. LEGAL NATURE OF THE JOINT VENTURE STRUCTURE AND LEGAL CAPACITY TO BE A PARTY

Traditional (contractual) joint ventures and business partnerships established for the purpose of carrying out a specific project do not possess separate legal personality under Turkish law. As consistently emphasized in the decisions of the General Assembly of Civil Chambers of the Court of Cassation and the relevant chambers of the Court of Cassation, only natural persons and legal entities may possess the capacity to be a party to legal proceedings. Consequently, joint venture structures lacking legal personality do not have active or passive standing to sue or be sued. Likewise, ordinary partnerships, which do not possess legal personality, lack legal capacity to be a party to enforcement proceedings. For this reason, an ordinary partnership cannot be a party to enforcement proceedings, and proceedings cannot be initiated directly against the partnership under its trade name alone [2].

Although a joint venture does not have legal personality, the partners are jointly and severally liable to creditors, directly and without limitation, with all of their assets for the obligations of the partnership.

In joint venture agreements, the lead partner (pilot partner) or another partner specifically authorized as a representative may be empowered, within the scope of its contractual authority, to carry out legal transactions on behalf of the joint venture, including initiating enforcement proceedings for the collection of receivables [3].

II. Standing and Proper Constitution of Parties in Enforcement Proceedings and Lawsuits Against Joint Ventures

The issue of against whom enforcement proceedings and legal actions should be directed in disputes involving joint ventures is of critical importance from the perspective of procedural law and public policy:

A. Requirement, as a General Rule, to Direct Proceedings Against All Partners

Since joint ventures in the form of ordinary partnerships do not possess active or passive legal standing, it is procedurally improper to initiate or conduct enforcement proceedings or litigation directly under the name of the ordinary partnership itself. As a matter of principle, enforcement proceedings and legal actions must be directed jointly against all natural or legal persons constituting the partnership. As emphasized in the decisions of the 12th Civil Chamber of the Court of Cassation, legal capacity to be a party is a matter of public policy and must be examined ex officio by the courts. Furthermore, each partner is entitled to raise an objection concerning the lack of party status without being subject to any time limitation (Court of Cassation, 12th Civil Chamber, E. 2016/27433, K. 2018/802, 06.02.2018; Court of Cassation, 12th Civil Chamber, E. 2016/8274, K. 2017/635, 19.01.2017; Court of Cassation, 12th Civil Chamber, E. 2022/2269, K. 2022/10202, 12.10.2022).

B. Exception: Subsequent Cure of Defective Party Constitution

Even where the Joint Venture itself is designated as the debtor in the enforcement request and the payment order, the initially defective constitution of parties shall be deemed cured if, following service of the payment order, the companies forming the joint venture each grant a separate power of attorney to the same legal counsel and file a timely objection to the enforcement proceedings through that common representative.

In such a case, the enforcement proceedings cannot be annulled solely on the ground that they were initiated under the joint venture’s trade name. However, where the partners do not object through a common representative, or where the claim is directed solely against the joint venture and a proper constitution of parties is not established in accordance with procedural requirements, the enforcement proceedings initiated against the partnership must be annulled upon complaint (Court of Cassation General Assembly of Civil Chambers, E. 2003/12-574, K. 2003/564, 08.10.2003) [4].

IV. CONCLUSION

In enforcement proceedings and lawsuits to be initiated against traditional and purely contractual Joint Ventures lacking separate legal personality, directing the claim solely against the Joint Venture itself entails significant procedural risks. In order to avoid the loss of rights, the general rule is that enforcement proceedings and legal actions must be directed against all partners constituting the joint venture.

Nevertheless, case law has established that where the partners object to a payment order through a common legal representative, proper constitution of the parties shall be deemed to have been achieved. Furthermore, in monetary claims, the rules governing permissive joinder of parties may be applied due to the partners’ joint and several liability.

It should also be borne in mind that the assets of the joint venture and its receivables held by third parties cannot be directly attached. Any attachment measures must be limited to the debtor partner’s share of profits or share in liquidation proceeds.

REFERENCES

[1] Tile, Latif. “Joint Ventures Under Turkish Law”, International Journal of Education Technology and Scientific Researches (IJETSAR), Cilt 3, Sayı 5, 2018, s. 17-27.

[2] Peksöz, Vildan. “Being Party of the Unregistered (Ordinary) Partnerships and Partners in the Proceedings in Enforcement Law”, Uyuşmazlık Mahkemesi Dergisi, Yıl 8, Sayı 16, Aralık 2020, s. 353-373.

[3] Çakır Çelebi, F. Betül. “Legal Character of Joint Venture”, Yıldırım Beyazıt Hukuk Dergisi (YBHD), Yıl 2, Sayı 2017/2, s. 97-126.

[4] In the concrete case, it is understood that the plaintiff creditor company initiated enforcement proceedings against the debtors … in file no. … of the Bakırköy … Enforcement Directorate for the collection of an excavation claim; that all three companies constituting the joint venture objected to the enforcement proceedings by granting powers of attorney to the same legal counsel, thereby staying the proceedings; and that the plaintiff company filed an action for the cancellation of objection by designating each partner of the joint venture separately as defendants. Although each possesses a separate legal personality individually, a joint venture formed by companies coming together for the execution of a project does not possess legal personality as an ordinary partnership. Even if the joint venture was designated as the debtor in the enforcement proceedings, it is clear that the initially lacking constitution of parties was thereby achieved, as the companies constituting the joint venture filed objections individually. Since the companies were also designated separately as defendants in the present lawsuit, proper constitution of parties has been satisfied. For these reasons, while the court should have examined the merits of the case, gathered the allegations, defenses, and evidence of the parties, and rendered a decision accordingly, dismissing the lawsuit on the grounds that proper enforcement proceedings had not been initiated was erroneous.” (Istanbul Regional Court of Justice, 15th Civil Chamber, E. 2019/678, K. 2019/728, 11.06.2019).