In its decision dated 8 July 2025 and numbered 2024/41763, the Constitutional Court evaluated claims concerning the loss of value of receivables arising from disputes between private legal entities due to inflation, taking into account previous Court of Cassation (Yargıtay) rulings, within the scope of the right to property and the right to an effective remedy.

 

As a result of this assessment, the Court held that there is no effective legal remedy available regarding claims for additional (excess) damages, that Article 122 of the Turkish Code of Obligations (Law No. 6098) does not provide adequate protection against the loss of value of receivables caused by inflation, and that the existing case law has failed to offer an effective solution to this legal issue.

 

Consequently, the Court ruled that the right to property (Article 35 of the Constitution) and the right to an effective remedy (Article 40) had been violated.

This decision was published in the Official Gazette No. 33032 on 29 September 2025.

 1.THE APPLICANT’S CLAIM

 

The applicant filed a lawsuit against the Bank before the Istanbul 10th Consumer Court on 17 December 2020. Although the applicant collected a total of TRY 119,114.76 — including the awarded execution denial compensation, attorney fees, and court expenses of TRY 17,028 — the principal debt and interest amounted to approximately TRY 92,822.60 at the time of payment. The applicant therefore claimed that the receivable had lost value beyond the interest awarded and, under Article 122 of the Turkish Code of Obligations (Law No. 6098), requested payment of TRY 100,000 plus interest accruing from 2 July 2020, while reserving the right to claim any further amount.

 

The 10th Consumer Court rejected the case on 9 March 2021, reasoning that although the applicant had requested default interest in the initial lawsuit, only legal interest was granted and not appealed. The court noted that since the Bank was a merchant, commercial/advance interest could have been awarded. However, it found that the Bank was not at fault in falling into default and that the conditions for additional (excess) damages were not met.

 

Upon appeal, the Regional Court of Appeal (BAM) upheld the decision, stating that while the burden of proving lack of fault rested on the Bank, the applicant failed to substantiate their damages with concrete evidence related to their specific circumstances — beyond general references to the country's economic conditions — and therefore the requirements for excess damages were not fulfilled.

 

The applicant further appealed to the 3rd Civil Chamber of the Court of Cassation (Yargıtay), which upheld the Regional Court’s judgment on 12 March 2024.

 2.COURT OF CASSATION’S ASSESSMENT ON ADDITIONAL DAMAGES

 

1.)The primary condition for additional (excess) damages is the debtor’s default on a monetary debt. This liability is separate from the main debt and interest obligation and constitutes an independent debt that arises and increases over time after the default.

 

2.)The creditor must have suffered a loss that cannot be compensated by default interest.

 

3.)The debtor must be at fault for falling into default, as liability for excess damages is based on fault, unlike the strict liability for default interest.

 

4.)There must be a causal link between the debtor’s default and the creditor’s additional damages.

 

5.)It is not necessary for the creditor to expressly reserve the right to claim additional damages during enforcement proceedings or litigation; such claims may be filed separately within the statute of limitations.

 

6.)The creditor must prove that their assets have decreased or that they have suffered loss of profit with concrete, credible, and clear evidence. General economic conditions such as inflation, high interest rates, currency depreciation, or economic instability cannot, by themselves, constitute sufficient proof of additional damages under Article 122. The burden of proof remains with the creditor, and general claims based on economic hardship cannot be the basis of a judgment.

 3.CONSTITUTIONAL COURT’S EVALUATION

 

In assessing the application, the Constitutional Court noted:

 

• Judicial authorities required the applicant to prove the alleged loss through concrete circumstances specific to their situation, rather than general economic conditions such as inflation, currency devaluation, high interest rates, or the decline in purchasing power, and did not accept these as sufficient proof of damages.

 

• When the interest rate imposed on debtors by the courts remains significantly below the inflation rate, and when there is no legal remedy available to compensate for this loss, debtors may be encouraged to delay payments, which could increase the number of disputes between private legal entities.

 

• If a creditor receives payment late and inflation erodes the value of the receivable, the creditor’s ability to recover the debt at its real value is hindered, while the debtor benefits by paying a lesser real amount.

 

• This situation upsets the fair balance between the parties, imposing a disproportionate burden on the creditor. Restoring this balance requires that the debtor pay the debt at its real (inflation-adjusted) value.

 

• Therefore, the Court examined whether there existed an effective legal remedy enabling the applicant to recover their receivable without significant loss of value due to inflation.

 4.THE CONSTITUTIONAL COURT’S DECISION

 

The Court concluded that the legal system lacks an effective remedy to compensate for damages caused by the loss of value of receivables due to inflation. Consequently, it found a violation of the right to an effective remedy (Article 40) in connection with the right to property (Article 35) of the Constitution.

 5.CONCLUSION

 

This decision was issued as a pilot judgment. As explained by the Constitutional Court, one of the main purposes of the pilot judgment procedure is to address systemic or structural violations that give rise to multiple similar complaints.

 

Where a structural problem is identified — causing repeated or potential future violations — the Court may initiate the pilot judgment procedure ex officio or upon request by the Ministry of Justice or the applicant.

 

The goal of this mechanism is to ensure that similar cases are resolved by the relevant authorities, thereby eliminating the root cause of the violation and preventing future cases.

 

Accordingly, this ruling indicates that the judicial approach requiring creditors to prove additional damages through evidence other than inflation may now be reconsidered and potentially revised in light of this Constitutional Court decision.

Stj. Av. İrem ÖZBERK 

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