Press Release No: Individual Application 12/20

Press Release concerning the Judgment Finding a Violation of the Right to Property due to Non-Execution of Court Decisions during Taking-Over of a Bank

On 12 December 2019, the Plenary of the Constitutional Court found a violation of the right to property safeguarded by Article 35 of the Constitution in the individual application lodged by Erol Aksoy (no. 2016/11026). 

The Facts

The Banking Regulation and Supervision Agency ordered the transfer of the management and control of the bank owned by the applicant and his family to the Savings Deposit Insurance Fund (“TMSF”).

As indicated by the applicant, the TMSF was offered to take over 51% share of Cine 5 Filmcilik ve Yapımcılık A.Ş., which was among the property owned by him, in return for 51 million dollars; however, this offer was rejected. Thereupon, the TMSF decided to offer for sale the property in the form of an economic and commercial integrity, and the property was sold by auction in return for 40 million and 500 thousand dollars.

The applicant brought an action for annulment of the TMSF’s decision whereby the property was put on sale, the tender specification was approved and the estimated value of the property was determined. The Council of State annulled the sales announcement and the TMSF’s decision. The applicant also filed an action before the incumbent administrative court, seeking revocation of the impugned act of sale. Making a reference to the decision rendered by the Council of State, the administrative court revoked the impugned acts. Thereupon, the applicant applied to the TMSF and requested information on the actions taken in order to execute the Council of State’s decision.

The TMSF informed the applicant that as the property had been transferred to the bidder awarded the tender, it no longer had any link with the property in question. It further noted that in case of execution of the annulment decision, the acquired rights of the bidder paying the contract price would have been impaired; that the principle of trust in public authority would have been undermined in terms of the bidder; and that it was possible, neither de jure nor de facto, to ensure the execution of the annulment decision.

The Applicant’s Allegations

The applicant maintained that his right to property had been violated due to non-execution of the court decision ordering annulment of the sale by auction of the media group which was performed during the process when the bank –of which he was a controlling shareholder– was taken over.

The Court’s Assessment

An administrative act which has been annulled by a tribunal exercising administrative jurisdiction is deemed to have never been performed. The administration is not relived of its obligation to execute an annulment decision even under extraordinary circumstances where its execution is impossible either de jure or de facto. 

If it is impossible either de jure or de facto to ensure full and proper execution of a court decision, the way of execution may be subject to a change. However, in such cases, regard must be had to the facts that such a change may take place without requiring those concerned to resort to the judicial authority afresh and that the redress offered through the alternative measure would not be manifestly disproportionate to the redress afforded by the full and proper execution of the decision.

It is incumbent on the administration to prove that it has applied its best efforts in order to ensure the execution of the court decision in spite of de jure or de facto impossibilities and that the obstacles precluding the execution cannot be eliminated. Thereafter, the administration is to explicitly demonstrate its intention to ensure the execution of the court decision by offering the most appropriate alternative solution, as required by the principle of restitutio in integrum, to the person concerned.

In the present case, as the applicant’s complaint concerns the non-execution of a final judicial decision, there is no need for the applicant to exhaust any other legal remedy. It should be therefore accepted that the available legal remedies have been duly exhausted.    

It is undisputed that the sale of the applicant’s media group was annulled by the court decisions which have become final. By virtue of these decisions, the impugned administrative acts have been deemed to become null and void with retrospective effect.

It must be taken into consideration that the action brought against the tender was indeed intended for annulment of the sale of the property to a third party. The refusal to execute the court decision ordering annulment of the sale as the sale has been already performed cannot be considered per se as a ground of de jure and de facto impossibility. Besides, regard being had to the fact that the tender and the relevant acts were made subject to judicial review by the incumbent courts, the bidder could be expected to foresee the possible annulment of the tender as a result of the annulment proceedings.

The non-execution of the court decisions annulling the sale of a property, which has constituted an interference with the right to property, would not only infringe the principle of rule of law but also hinder the procedural safeguards inherent in the protection of the right to property.

In the present case, it is clear that the court decisions annulling the impugned tender and sale of the property were not executed in spite of having final and operative effect. Nor was any measure taken by the public authorities to ensure the execution of these decisions.

In addition, the administration failed to demonstrate in a concrete manner the existence of any de jure and de facto impossibility as well as of an obstacle, which was impossible to overcome, to the execution of the court decisions. Nor did it offer an alternative solution to the applicant. The administration also displayed a passive conduct during the impugned process by giving unfavourable replies to the applicant’s letters. 

Consequently, the Constitutional Court has found a violation of the right to property safeguarded by Article 35 of the Constitution.   

This press release prepared by the General Secretariat intends to inform the public and has no binding effect.