Third-Party Ownership Claims over Property Not Belonging to the Debtor during Attachment

– THIRD-PARTY OWNERSHIP CLAIM RAISED BY THE DEBTOR
Where, while an attachment is being carried out by the creditor in respect of the debt in the enforcement file, the debtor indicates that property in the debtor’s possession is owned by or pledged to another person, or a third party claims ownership of or a pledge over that property, the enforcement office records this in the attachment and enforcement minutes and notifies both parties accordingly. In addition, the enforcement office grants the creditor and the debtor a period of three days to state whether they object to the third-party ownership claim (istihkak iddiası). If they remain silent, they are deemed to have accepted the claim.

If the debtor or third party who has become aware of the attachment of the property does not make a third-party ownership claim within seven days of becoming aware of it, they lose the right to assert that claim in the same enforcement proceedings. Persons living with the claimant at the date on which the claim is made or the third-party ownership action is brought, or the business partners of such persons, are deemed to have become aware of the attachment of the property on the date on which the claim is made or, where the third-party ownership action is brought under paragraph 9 of Article 97 (A third party who has not been given the opportunity to make a third-party ownership claim may, within seven days of becoming aware of the attachment, bring a third-party ownership action before the enforcement court in respect of the attached thing or, if it has been sold and the proceeds have not yet been paid to the creditor, in respect of the proceeds. Otherwise, the third party loses the right to assert that claim in the same proceedings. In that case, at the claimant’s request, the judge is obliged to decide urgently, in accordance with the above provisions, whether the proceedings are to be suspended. This decision may also be given without hearing the other party.), on the date on which the action is brought.
If the creditor or the debtor objects to the third-party ownership claim, the enforcement officer immediately refers the file to the enforcement court. The enforcement court, after examining the matter on the file or, if it considers it necessary, at a hearing to which the persons concerned are summoned, decides according to its assessment whether the proceedings are to continue or be suspended.

Where there are serious grounds for accepting that the third-party ownership action is being abused solely to delay the sale, the court rejects the request for suspension of the proceedings. If suspension of the proceedings is ordered, security as specified in Article 36 is taken from the claimant against the creditor’s possible loss should the claimant prove to be in the wrong. The type and amount of the security are determined according to the nature of the available evidence.
The third party must bring a third-party ownership action before the enforcement court within seven days of the pronouncement or service of the court’s decision. If no action is brought within this period, the third party is deemed to have waived its claim as against the creditor.

In third-party ownership actions concerning goods subject to a right of retention in leased immovable property or ships, no suspension order may be given unless the provisions set out in paragraph 1 of Article 268 of the Code of Obligations are complied with. The time limits in Article 106 do not run during the action.

A third party who has not been given the opportunity to make a third-party ownership claim in accordance with the above provisions may, within seven days of becoming aware of the attachment, bring a third-party ownership action before the enforcement court in respect of the attached thing or, if it has been sold and the proceeds have not yet been paid to the creditor, in respect of the proceeds. Otherwise, the third party loses the right to assert that claim in the same proceedings. In that case, at the claimant’s request, the judge is obliged to decide urgently, in accordance with the above provisions, whether the proceedings are to be suspended. This decision may also be given without hearing the other party.

If the attached property has been converted into money before the third-party ownership action is concluded, the judge also decides whether those proceeds are to be withheld until the outcome of the proceedings, or paid to the creditor immediately against security or, depending on the circumstances, without security. The third-party ownership action is heard in accordance with the general provisions and under the simplified procedure.

Agreement between the third party and the debtor on a claim raised before the enforcement officer concerning attached goods has no effect on the creditor. The third party must prove this claim. However, the debtor’s acceptance of the third party’s claim that the attached goods are the third party’s property or are pledged to it constitutes evidence against the debtor, and the debtor may not subsequently make any claim contrary to that admission. If suspension of the proceedings is ordered following a third-party ownership action and the action is ultimately dismissed, the claimant is ordered to pay compensation of not less than twenty per cent of the amount of the creditor’s claim whose satisfaction was delayed by reason of the action. A claimant in a third-party ownership action who lodges an appeal or an appeal on points of law against the decision dismissing the action may request a time limit from the enforcement office under Article 36.

If the third-party ownership action succeeds and the bad faith of the creditor or debtor who objected to the claim under the first paragraph is established, compensation of not less than fifteen per cent of the value of the attached property is awarded against the objecting party together with the main action. In an attachment made against a husband, the wife may herself pursue her rights over her personal property without being subject to the provision of Article 160 of the Civil Code.

In response to a third-party ownership action, the creditor who caused the attachment to be made may, relying on the provisions of Chapter 11 of this Law and without being obliged to produce a provisional or final certificate of insolvency, bring a counterclaim for annulment. The judge freely assesses all the evidence submitted by the parties in the action and the counterclaim. Third-party ownership actions are heard and decided swiftly and before other actions.

– THIRD-PARTY OWNERSHIP CLAIM OF A THIRD PARTY

Attachment of an Asset in the Possession of a Third Party

If the attached thing is not in the debtor’s possession but is held by a third party claiming ownership or another real right over it, the property is not taken into safekeeping provided that the third party accepts custodianship. The enforcement officer grants the creditor seven days to bring a third-party ownership action against the third party before the enforcement court. If no such action is brought before the enforcement court within this period, the third party’s claim is deemed accepted. The attached property may not be sold until the action brought by the creditor within the time limit has been concluded. This paragraph also applies where the attachment is made in the third party’s absence and a third-party ownership claim is made on the third party’s behalf.

PRESUMPTION OF OWNERSHIP IN THIRD-PARTY OWNERSHIP ACTIONS

Presumption of Ownership and Burden of Proof in Third-Party Claim Actions

A person who holds movable property is deemed to be its owner. Even where the debtor and third parties hold movable property jointly, the property is deemed to be in the debtor’s possession. Among the property in jointly occupied premises, items which by their nature clearly belong to the wife, the husband or the children, or which do so by custom and usage, trade, profession or occupation, are presumed to belong to them. The burden of proving the contrary of this presumption falls on the person asserting it.

The claimant in a third-party ownership action is obliged to show how they acquired the property and the legal and factual reasons and events that led to its being in the debtor’s possession, and to prove them.

COMPETENT COURT AND TERRITORIAL JURISDICTION

Competent Court and Venue

The court with subject-matter jurisdiction over an action concerning a third-party ownership claim made during an attachment is the enforcement court. The court with territorial jurisdiction is the enforcement court of the place where the enforcement proceedings are being conducted or where the attached property is located. Territorial jurisdiction is not exclusive, and in attachments carried out by delegation, the court to which the delegated enforcement office is attached also has jurisdiction.