What is a bill of guarantee?

There is no provision regarding guarantee bonds in the Turkish Commercial Code. However, in practice, it is seen that a bond of guarantee is frequently issued in order to guarantee a performance. A guarantee bond can be issued to guarantee any receivable. There is no restriction in this regard. It can be arranged between traders or between employers and employees.

Guarantee bills are different from bills regulated in the Turkish Commercial Code. In order for a promissory note to have the nature of a promissory note, it must contain an unconditional acknowledgment of debt. However, guarantee bonds are given conditionally. In this respect, the guarantee bond cannot be subject to foreign exchange tracking. Apart from these, there are mandatory form requirements for bonds. However, there is no mandatory form requirement in the guarantee bond. For detailed information about the form conditions of bills, you can review our article titled Form Conditions of Bills.

HOW TO ISSUE A BILL OF GUARANTEE

1-It should be clearly stated that the promissory note is issued for collateral purposes and should be written in the text of the promissory note. On the back side of the promissory note, the relationship on which it was prepared and the contract under which it was prepared should be written. As a matter of fact, the opinion of the Supreme Court is in this direction. "In the bond dated 24.3.2008 and amounting to 150,000 YTL, which is relied upon in the prosecution, there is no statement that the bond was given for collateral purposes, nor is there any record in the general loan agreement dated 24.3.2008 between the parties that the underlying bill was given as collateral."

2-If there is no contract between the parties, a protocol should be drawn up stating that the bill is given as collateral and the information of this protocol should be written in the bill.

3-The maturity section of the promissory note should not be left blank, and instead of maturity, a statement saying "it is a guarantee deed" should be added.

4-Detailed information about the reason for the issuance of the promissory note should be written on the back of the promissory note. In this information, the subject, date and duration of the contract must be specified.

5-Non-negotiable clause must be added to the promissory note.

6-It is just a "guarantee" on the promissory note, etc. Adding a phrase does not turn that bond into a guarantee bond. The 12th Civil Chamber of the Supreme Court of Appeals stated this issue in a decision dated 20.09.2011."Just because the bill is written as "guarantee bond" does not prevent the pursuit of this document through a lien specific to bills of exchange." As adopted in the decisions numbered 2001/12-496, the relationship that the underlying document is the guarantee of must be proven with a written document. In the concrete case, the debtors did not submit any written document regarding their objections. In this case, the debtor party could not prove the contrary of the claim that the promissory note was issued in return for the debt, with a document that is valid in terms of prosecution law and stipulated in Article 169/a-1 of the EBL. "Although there is no statement of acceptance stating that the promissory note that is the basis of the pursuit is a guarantee bond, it is inappropriate for the court to accept the objection instead of rejecting it." He stated it with his expressions.

HOW TO PROVE A BILL OF GUARANTEE

If it is understood from the text of the promissory note that the promissory note is a guarantee document, the promissory note will no longer have the characteristics of a bill of exchange. If the promissory note is subject to prosecution, the issuer of the promissory note may claim against anyone that it is a guarantee document and does not qualify as a bill of exchange. If an enforcement action has been taken regarding the promissory note, the issuer may file a complaint with the enforcement court. Supreme Court 12th HD. In a decision dated 2019, this situation was stated as follows: "In the concrete case, on the back of the promissory note in question; "this deed has been given by us as a guarantee for half of the independent section number 1 on the construction to be built on island 10727, parcel 106". Since the said phrases eliminate the requirement for the deed to contain an unconditional acknowledgment of debt, it is understood that the promissory note does not have the characteristics of foreign exchange and is a guarantee deed. In this case, since the existence and amount of the receivable arising from the promissory note and whether it should be collected necessitates trial, the court should decide to cancel the proceedings in accordance with Article 170/a of the Bankruptcy Code (Debtor's complaint in terms of foreign exchange law), but it is inappropriate to make a decision to reject the request with written justification." He expressed it as follows.

However, if it is not understood from the text of the promissory note that the promissory note is a guarantee document, the issuer can only claim this situation as a personal defense against the beneficiary. However, he must prove this claim with written evidence. Here, the issuer must prove the collateral nature of the bill. If the promissory note has been endorsed, the drawer cannot claim security against the holder.

TRANSFER OF GUARANTEE DEED

Since guarantee bonds do not have the characteristics of negotiable instruments, they cannot be transferred through endorsement + transfer of possession. However, it is possible to transfer the receivables through assignment.