CEDH · CASELAW;JUDGMENTS;CHAMBER;ENG — 16 mars 2021

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TURKEY (Applications nos. 21392/08 and 2 other applications)     JUDGMENT   Art 6 § 1 (civil) • Fair hearing • Imposition of litigation costs on applicant, for proceedings which had become devoid of purpose, determined by domestic courts in fair and adversarial manner Art 1 P1 • Control of the use of property • Proportionate, temporary injunctions on applicant’s assets lasting more than ten years in the context of proceedings for his role as general manager of formerly public banks • Provisional and precautionary measures, with a view to securing a possible award of damages in favour of the creditor   STRASBOURG 16 March 2021   FINAL   16/06/2021   This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision.   In the case of Karahasanoğlu v. Turkey, The European Court of Human Rights (Second Section), sitting as a Chamber composed of:   Jon Fridrik Kjølbro, President,   Marko Bošnjak,   Aleš Pejchal,   Valeriu Griţco,   Egidijus Kūris,   Branko Lubarda,   Saadet Yüksel, judges, and Hasan Bakırsı, Deputy Section Registrar, Having regard to: the applications (nos.   21392/08, 53870/09 and 32844/17) against the Republic of Turkey lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Turkish national, Mr Şükrü Karahasanoğlu (“the applicant”), on the various dates indicated in the Appendix; the decision to give notice of the applications to the Turkish Government (“the Government”); the parties’ observations; Having deliberated in private on 9 February 2021, Delivers the following judgment, which was adopted on that date: INTRODUCTION 1.     The applicant complained of unfairness in proceedings, in particular, their suspension, about having to bear litigation costs, about not being awarded lawyers’ fees in proportion to the amounts claimed by the claimant, and of a disproportionate interference with his property rights on account of the lengthy injunctions on his assets ordered by the domestic courts in order to secure the claim of the claimant. THE FACTS THE CIRCUMSTANCES OF THE CASE 2.     The applicant was born in 1947 and lives in Istanbul. He was represented by Mr E. Eraslan, a lawyer practising in Istanbul. 3.     The Government were represented by their Agent. 4.     The facts of the case, as submitted by the parties, may be summarised as follows. Background to the case 5.     The applicant is a former executive and director of two previously public banks, Sümerbank and Etibank. 6.     Sümerbank and Etibank were originally State-owned companies which operated in a number of different sectors, including the banking sector. 7.     They were restructured for privatisation purposes. As part of the restructuring process, their banking assets were transferred to two newly incorporated legal entities, Sümerbank A.Ş. (hereinafter “Sümerbank”) and Etibank Anonim Ortaklığı (later renamed Etibank A.Ş. – hereinafter “Etibank”). 8.     On 17 October 1995 Sümerbank was privatised and İpeks İplik Tekstil Sanayi A.Ş., a joint-stock company owned by a businessman named Hayyam Garipoğlu and his companies, became the majority shareholder of the bank. 9.     On 2 March 1998 Etibank was privatised and Medya İpek Holding A.Ş. (later renamed Medya Sabah Holding A.Ş.), a joint-stock company, which at the time was partly owned by a businessman named Dinç Bilgin and his companies, became the majority shareholder of the bank. 10.     The applicant was appointed to the management and board of directors of Sümerbank and Etibank following their privatisation, and resigned from his duties before they were later taken over by the State. 11.     He was general manager of Sümerbank and Etibank from 31 October 1995 to 16 February 1998 and from 2 March 1998 to 25 March 1999 respectively. Background information on the Savings Deposit Insurance Fund 12.     The Savings Deposit Insurance Fund ( Tasarruf Mevduatı Sigorta Fonu – hereinafter “the Fund”) was established in 1983 to protect depositors and enhance the stability of the banking system. 13.     The Fund was a separate legal entity but remained under the control of the Central Bank of the Republic of Turkey and the Banking Regulation and Supervision Agency ( Bankacılık Düzenleme ve Denetleme Kurumu – hereinafter “the Agency”) until it became an independent administrative authority in 2003. 14.     The Fund’s mandate, as described in the repealed Banks Act (Law   no. 3182) of 25 April 1985, which entered into force on 2 May 1985, was initially limited to the insurance of the savings of depositors in banks. 15.     The repealed Banking Activities Act (Law   no.   4389) of 18 June 1999, which entered into force on 23 July 1999 and replaced Law no. 3182, broadened the Fund’s mandate to include the management of resolution processes of financially distressed banks. 16.     Law no. 4389 provided for the transfer of the management and supervision of a bank and the rights of its shareholders, except dividends, to the Fund in the event that the bank encountered certain financial problems (section 14(3)) or its resources and assets were misused or abused by the majority shareholders (section 14(4)). 17.     Law no. 4491 of 17 December 1999, which entered into force on 19   December 1999, introduced important changes to Law no. 4389, particularly its provisions governing the scope of the Fund’s mandate in respect of bank resolution processes. 18.     Section 14(5), as amended by Law no. 4491, allowed the Fund to acquire ownership of shares of a transferred bank on the condition that the Fund assumed the losses of the bank corresponding to its paid-up equity capital on the basis of its balance sheet at the time of the transfer. 19.     Under the same provision, the Fund, in addition to the right to acquire the shares of a transferred bank, was also entitled to request the return of or compensation for losses incurred by the bank as a result of misuse and abuse of its resources. 20.     To recover those losses, under section 17(2) of Law no. 4389, the Fund was authorised to bring civil proceedings to engage the personal liability of the majority shareholders and executives of the transferred bank who were responsible for the transactions which constituted misuse of the bank’s resources, regardless of whether or not the bank had become insolvent. 21.     For the purpose of securing the recovery of those losses, the Fund was also entitled to request the courts to take precautionary measures, such as a temporary injunction on the assets of those persons, by virtue of section   14(5)(b) of Law no. 4389. 22.     Under section 15 of Law no. 4389, the Fund was also exempt from financial liabilities such as taxes, charges and levies. Transfer of Sümerbank and Etibank to the Fund 23.     Following the failure of the measures taken to improve their financial situation, fırst Sümerbank, by a decision of the Council of Ministers of 21 December 1999, and then Etibank, almost a year later, by a decision of the Banking Regulation and Supervision Board ( Bankacılık Düzenleme ve Denetleme Kurulu – hereinafter “the Board”) of 27 October 2000, were transferred to the Fund pursuant to section 14(3) and (4) of Law   no. 4389. 24.     As a result, the Fund took over the management and supervision of those banks as well as the rights of their shareholders, except dividends. 25.     The Fund also acquired ownership of the shares of those banks under section 14(5) of Law no. 4389, as per the Council of Ministers’ decision. Proceedings brought against the applicant by the Fund and subsequent legal and factual developments 26.     Following the transfer of Sümerbank and Etibank to the Fund, the auditors of the Board examined the transactions that the former executives of those banks had authorised and approved in their capacity as directors and/or general managers. 27.     For each transaction which, according to the auditors’ reports, constituted misuse or abuse of the bank’s resources in violation of banking laws and rules of practice, the Fund brought separate personal liability lawsuits (details of the lawsuits which are the subject of the present applications are set out in the Appendix) against the applicant and others under section 17(2) of Law no. 4389. 28.     In those lawsuits, the Fund asked the domestic courts not only to hold the applicant and other defendants fınancially liable for the losses allegedly incurred by the banks as a result of the unlawful transactions, but also to declare him personally bankrupt under the same provision. 29.     At the beginning of the proceedings, the Fund also asked the courts to place an injunction on the assets of the defendants, including the applicant, in accordance with section 14(5)(b) of Law   no.   4389. 30.     With the exception of a few sets of proceedings, the courts granted the Fund’s requests and issued in each set of proceedings separate temporary injunctions covering all the applicant’s assets, including his movable and immovable property, his receivables and rights against third parties, without requiring the Fund to post any collateral (see the Appendix for the cases in which the Fund’s request for an injunction was granted and the scope of the injunction on the applicant’s assets). 31.     While the proceedings against the applicant were ongoing, Law   no.   4389 was amended by Law no. 4743 and Law   no.   4672. The amendments not only granted the Fund exemptions specific to proceedings for the recovery of losses of transferred banks, but also broadened the scope of receivables that it could claim in connection with those banks. The Fund was also granted additional powers, such as the power to enter into agreements with debtors and to ask the courts to suspend lawsuits already filed for the duration of the agreements. 32.     The Banking Activities Act (Law no. 5411) of 19 October 2005, which came into force on 1 November 2005, repealed and replaced Law   no.   4389. 33.     Law no. 5411 not only preserved the prerogatives of the Fund under Law no. 4389, but also gave it additional powers to collect its receivables in connection with a transferred bank. Accordingly, the Fund was authorised to take over the management and shareholding of companies owned by the majority shareholders of the banks and to sell the shares and assets of the companies in a bundle to achieve maximum recovery of the amounts owed to it. Proceedings concerning Sümerbank 34.     The Fund brought several different lawsuits against the applicant for the losses caused to Sümerbank as a result of loan transactions which he had authorised during his time as manager and director of the bank. 35.     These proceedings are the subject of application no. 32844/17 (see Part A of the Appendix for details). In these proceedings, the applicant argued that during the period in which he had been general manager of the bank, that is, until 1998, the bank had not reported any losses. The applicable law governing the liability of bank managers at the relevant time had not been Law no. 4389, which had only entered into force in 1999, but Law no. 3182, which had not contained any provisions providing for the bankruptcy of bank managers in the event of a bank’s insolvency on account of unlawful actions of its managers. 36.     While the proceedings against the applicant were still ongoing, on 12   August 2004 the Fund signed a protocol with, among others, Hayyam Garipoğlu and his companies (hereinafter “H.G. Group”), the majority shareholders of Sümerbank at the time the bank was transferred to the Fund. This protocol entered into effect on 27 January 2006. 37.     The protocol was aimed at restructuring the debt that H.G. Group owed to the Fund by reason of the loans and other transactions that had allegedly caused losses to Sümerbank and defining the terms of repayment of the debt. It also contained a special provision concerning the lawsuits filed by the Fund to recover the losses of Sümerbank. According to that provision, the proceedings against the applicant and other individuals were to be suspended as long as the parties complied with the terms of the protocol. 38.     The parties to that protocol then signed additional protocols on 7   January 2009, 9 April 2010 and 25 June 2010 to supplement the original protocol of 12 August 2004. 39.     The above-mentioned protocols concluded between the Fund and H.G. Group had a significant impact on the development of the proceedings brought against the applicant. In some sets of proceedings, the courts decided that the lawsuits had become devoid of purpose, whereas in others the Fund decided to withdraw the lawsuits. Lawsuits which became devoid of purpose 40.     In two sets of proceedings (case nos. 2011/399 E. and 2012/291 E.), the courts found it established that the payments made by H.G. Group to the Fund under the protocols dated 12 August 2004 and the additional protocols dated 7 January 2009, 9 April 2010 and 25 June 2010 had compensated the Fund for the alleged losses. On that basis, the courts decided that the lawsuits against the applicant had become devoid of purpose ( davanın konusuz kalması ). 41.     In the first set of proceedings (case   no.   2011/399 E.), the first-instance court held that in proceedings where a lawsuit became devoid of purpose because of subsequent events, the litigation costs and lawyers’ fees of the party who “prevailed” at the time the lawsuit was filed, that is, who appeared to be more in the right, should be reimbursed by the other party. Accordingly, the court found that the applicant had not caused the lawsuit to be filed on account of any culpable behaviour and therefore awarded him a fixed amount of 1,200 Turkish liras (TRY – equivalent to approximately 512 Euros (EUR) at the time of the decision) in lawyers’ fees, noting that the status of the Fund should be taken into account under the terms of the Tariff on Minimum Lawyers’ Fees (hereinafter “the Tariff”). 42.     The applicant appealed against the first-instance court’s decision, arguing that he should have been awarded lawyers’ fees on a pro rata basis, that is, in proportion to the amount claimed by the Fund. 43.     On 14 April 2014 the Court of Cassation dismissed the appeal and upheld the first-instance court’s decision. 44.     In the second set of proceedings (case no.   2012/291 E.), the applicant lodged a petition with the first-instance court on 28 September 2012 stating that he would agree to waive his right to litigation costs and lawyers’ fees on the condition that the Fund also did the same. 45.     However, at a hearing on 31 December 2012 the Fund asked the court to order the applicant to pay lawyers’ fees, arguing that he had caused the lawsuit to be filed. 46.     The first-instance court, in a decision delivered on the same date, held that there was no reason to award any lawyers’ fees to either of the parties. As regards litigation costs, it decided that they would be borne by the Fund since the financial losses suffered by the latter had been remedied before the parties had had a chance to discuss the applicant’s alleged culpability in the management of the impugned loan during the proceedings before it. 47 .     The applicant did not appeal and the decision became final on 3 May 2013. Lawsuits withdrawn by the Fund 48.     In two sets of proceedings (case   nos.   2008/271   E. and 2009/650 E.), the Fund, during the course of those proceedings, decided to withdraw the lawsuits against the applicant. 49.     During the first set of proceedings (no.   2008/271E.), the Fund lodged a petition with the court on 25 February 2011 expressing its wish to withdraw the lawsuit and waive its right to lawyers’ fees and litigation costs, as well as its right to appeal against the decision. The applicant consented to the Fund’s wish to withdraw the case and waived his right to lawyers’ fees. Subsequently, by a decision dated 25   May 2011, the first-instance court severed the lawsuit against the applicant (registering it under case no. 2011/293 E.) and dismissed it on account of its withdrawal by the Fund. 50.     During the second set of proceedings (case   no.   2009/650 E.), at a hearing on 28 February 2011 the Fund informed the court that it wished to withdraw the lawsuit. On the same date, the applicant lodged a petition with the court consenting to the withdrawal of the case provided that the temporary injunctions on his assets were lifted by the courts and waiving his right to lawyers’ fees and right to appeal. Accordingly, on 9 March 2011 the court dismissed the lawsuit against the applicant on the grounds that it had been withdrawn and lifted the temporary injunction on his assets. The parties were ordered to bear their own litigation costs and lawyers’ fees. Neither of the parties appealed against this decision. Proceedings concerning Etibank 51.     The Fund brought several different lawsuits against the applicant for the losses caused to Etibank as a result of loans and other types of transactions which he had authorised during his time as executive of the bank. 52.     These proceedings are the subject of applications nos. 21932/08 and   53870/09 (see Part B of the Appendix for details). Protocols concluded between the Fund and the majority shareholders of Etibank 53.     Dinç Bilgin and his companies gradually acquired all shares in Medya Sabah Holding A.Ş. and became the majority shareholders of Etibank at the time the latter was transferred to the Fund. 54.     While the proceedings against the applicant were still ongoing, on 17   November 2003 the Fund signed a protocol with, among others, Dinç Bilgin and his companies, including Medya Sabah Holding A.Ş., (hereinafter “Medya Group”), which owned and operated a number of assets in the media sector, including the television channel ATV and the daily newspaper Sabah . 55.     According to the protocol, Medya Group would transfer some of its assets in the media sector and assign its receivables under some of its commercial agreements to the Fund towards the settlement of the amounts that it owed to the Fund for losses caused to Etibank as the bank’s majority shareholder. 56.     However, due to difficulties in the implementation of this protocol, Dinç Bilgin entered into an arrangement with another businessman, Turgay Ciner, who also owned companies that operated in the media sector (hereinafter “Merkez Group”). 57.     According to that arrangement, the assets and receivables that could not be transferred to the Fund would be acquired by Merkez Group, which, in return, would assume Medya Group’s obligations towards the Fund under the protocol of 17 November 2003. 58.     A protocol was concluded between, among others, the Fund, Medya Group and Merkez Group on 3 May 2005 to amend the protocol of 17   November 2003 pursuant to the terms of that arrangement and put the amended protocol into effect. 59.     However, on an unspecified date, the Fund cancelled the protocols of 17 November 2003 and 3 May 2005 on the grounds that Dinç Bilgin and Turgay Ciner had allegedly colluded in violation of the terms of the protocols. 60.     As a consequence, the Fund, using the powers granted by Law   no.   5411, took over the management, supervision and shareholders’ rights, except dividends, of the companies forming Medya Group and Merkez Group and also seized the media sector assets of those companies. 61.     The Fund put together the shares of these companies and their assets, which also included the television channel ATV and the daily newspaper Sabah , formed a single unit named ATV-Sabah Economic and Commercial Unit ( ATV-Sabah Ticari ve İktisadi Bütünlüğü – hereinafter “the Unit”) and called for tenders for its sale. 62.     On 5 December 2007 the Fund sold the Unit for 1.1 billion United States dollars (USD). 63.     On 28 November 2008 the Fund concluded a new protocol with Medya Group and Merkez Group to define the terms of repayment of the amount that Medya Group owed to the Fund with the proceeds from the sale of the Unit. 64.     The relevant provisions of the protocol dated 28   November 2008 concerning the proceedings against the applicant and its entry into effect read as follows: Article 8.7 “Following the signature of this protocol, upon the withdrawal of the civil or administrative lawsuits filed by the debtors and the finalisation of the lawsuits and enforcement proceedings brought by the Fund, in respect of the financial liability proceedings under case no. 2001/1200E.,...2001/2193E. before the 1st Commercial Court of Istanbul ..., for personal bankruptcy and all other personal bankruptcy and compensation proceedings, the Fund shall request that the relevant courts suspend these proceedings for all defendants and all claim amounts. Following the finalisation of the ranking list for the ATV-Sabah Economic and Commercial Unit, the Fund shall take the necessary legal steps to ensure that the suspended financial liability, personal bankruptcy and recovery and compensation proceedings shall be rendered devoid of purpose in so far as they concern the claims which fall within the scope of this protocol ...” Article 18 “... This protocol shall enter into effect after its signature by the parties provided that the debtors and/or their relatives by blood or marriage and/or related natural and legal persons withdraw the lawsuits filed against the Fund, that they allow for the finalisation of all lawsuits and enforcement proceedings and the tender for the sale of ATV Sabah Economic and Commercial Unit, and that the ranking list pertaining to the purchase price becomes final.” 65.     Before their shares and assets were acquired by the Fund, Medya Group and Merkez Group companies were going concerns, which had been doing business with third parties. By taking the management, shares and assets of those companies, the Fund also assumed their obligations towards third parties. 66.     Accordingly, the proceeds from the sale of the Unit, which comprised assets and shares of Medya Group and Merkez Group companies, would therefore also have to be used to repay the debts of those companies to those third parties, which the Fund had taken over. 67.     To set out the way in which the proceeds from the sale of the Unit would be distributed to those third-party creditors, the Fund prepared a list in accordance with Law no. 5411 and the Regulation on the Sale of Seized Assets Forming an Economic and Commercial Unit by the Savings Deposit Insurance Fund (“the Regulation”) indicating the ranking of each creditor (hereinafter “the ranking list”). 68.     The ranking list was published in the Official Gazette on 2   December 2008. 69.     Subsequently, some of the creditors of Medya Group and Merkez Group companies brought civil and administrative proceedings against the Fund seeking to annul the sale of the Unit or challenging their place in the ranking list. 70.     Both the protocol of 28 November 2008 and the developments related to those protocols had a significant impact on the proceedings against the applicant concerning Etibank. In the first lawsuit, the courts decided that it had become devoid of purpose, whereas in the second the courts suspended the proceedings at the Fund’s request pursuant to the terms of the protocol. Lawsuit which became devoid of purpose 71.     In one set of proceedings (case   no.   2008/192   E.), the courts ruled that the lawsuit had become devoid of purpose and that there was no reason to deliver a judgment. The court held that while the conditions for declaring the applicant bankrupt had been met on account of his responsibility for providing unlawful loans, the borrowers in the impugned loan transactions had compensated the bank for its losses by fully repaying the debt. 72.     In a decision of 17 April 2006 the court initially ordered the applicant and other defendants to pay a certain amount in litigation costs and fixed lawyers’ fees. 73.     The applicant appealed against this judgment to the Court of Cassation, arguing, inter alia , that the court’s decision to impose on him litigation costs and lawyers’ fees and not to award him any lawyers’ fees on a pro rata basis was not in accordance with the law. 74.     On 22 February 2008 the Court of Cassation upheld the first-instance court’s judgment, except its decision concerning litigation costs, and remitted the case to the first-instance court for a recalculation of the litigation costs. 75.     On 30 June 2008 the first-instance court ordered the applicant jointly with the other defendants to pay an amount of TRY   11,678.43 (equivalent to approximately EUR 7,116 at the time of the decision) in litigation costs and held that there was no reason to issue a separate ruling as regards the parts of its previous judgment which had become final with the Court of Cassation’s decision. 76.     The applicant appealed against this decision, complaining about the imposition of litigation costs on him, which in his view, did not comply with the principles of a fair trial because the courts had not assessed the case on the merits. 77.     On 21 May 2009 the Court of Cassation dismissed the appeal without responding to the applicant’s argument about litigation costs. Lawsuit suspended at the Fund’s request 78.   In one set of proceedings (case no. 2008/509 E.), the first-instance court decided to suspend the proceedings against the applicant at the Fund’s request in accordance with the relevant provisions of the protocol of 28   November 2008 and the relevant provisions of Law   no.   4389 and Law   no. 5411 until the ranking list drawn up for the distribution of the proceeds from the sale of the Unit was finalised pursuant to Articles 6.2 and 8.7 of the protocol of 28 November 2008. In that connection, the courts noted that even though the applicant had not consented to the suspension of the proceedings, the conditions for his personal bankruptcy on the basis of his responsibility for granting unlawful loans during his time as executive of the bank had been met. According to the reasoning of the courts, in such circumstances and on the basis of the prerogative conferred on the Fund by domestic law, the latter had the right to request the suspension of the proceedings until it secured the reimbursement of the bank’s losses. In view of the “one satisfaction principle” ( tek zarar tek tazminat ilkesi ), the courts considered that the amount of the debt for which the applicant would remain liable would rest contingent on the payments made by the debtor party to the protocol. Furthermore, in the event that the debt was paid in full, the case against the applicant would become devoid of purpose. In view of those possibilities and the direct consequences they would have on the compensation amounts the applicant would be required to pay, the courts decided that it would be best to suspend the proceedings. 79.     In their decisions, the courts also held that there was no need to make any determination as to lawyers’ fees on the grounds that the suspension decision could not be regarded as a final decision on the merits of the dispute. 80.     The applicant appealed against these decisions, arguing that he did not consent to the suspension of the proceedings and insisted that the courts continue to examine the case. He further submitted, inter alia , that the courts’ decision not to award him any lawyers’ fees, despite the fact that he had been represented by a lawyer throughout the proceedings, was not in accordance with the law. 81.     The Court of Cassation dismissed the applicant’s appeal and upheld the first-instance court’s decision on 15 June 2009. Temporary injunctions placed on the assets of the applicant 82.     During the course of the majority of the proceedings where the courts granted the Fund’s request for an injunction on the basis of sections 14(5)(bc) and 17 of Law no. 4389, the domestic courts agreed to gradually reduce the scope of the injunction so as to allow the applicant to use either his salary and retirement pension or the money in his accounts up to a certain amount. 83.     In the proceedings registered under case nos. 2008/271 E. and 2009/650 E. concerning Sümerbank, the injunctions on the applicant’s assets were lifted on account of the withdrawal of the lawsuit by the Fund. Thus, in those proceedings, the temporary injunction on the applicants’ immovable property remained in place for almost eleven years, whereas the injunction on his movable property, including his salary, lasted for about six years in the proceedings under case no. 2008/271E. and less than a month in the other proceedings. 84.     In the proceedings registered under case nos. 2008/192 E. and 2008/509 E. concerning Etibank, the courts eventually decided to lift the injunction at the applicant’s request. In those proceedings, the courts held that the injunction on the applicant’s assets had automatically lapsed ( mürtefi ) under Article 112 of the repealed Civil Procedure Code (Law   no.   1086) on account of the absence of any express ruling regarding the maintaining of the injunction in the decisions delivered by the first-instance court. Thus, the temporary injunctions on the applicants’ assets de jure remained in place for seven years but in reality lasted about ten years, since it was not until 2011 that the courts clarified that the injunctions had lapsed on account of the absence of a ruling in their decisions of 30 June and 31 December 2008 respectively. RELEVANT LEGAL FRAMEWORK AND PRACTICE Provisions of banking legislation concerning bank resolution processes and the Fund’s powers and privileges Banking Activities Act, Law no. 4389, as amended by Law no. 4491 85.     The relevant provisions of Law no. 4389 read as follows: Section 14 “4.     If the Agency determines that the shareholders of a bank who, directly or indirectly, solely or jointly, hold the bank’s management and supervision, have used the bank’s resources in their favour so as to jeopardise the secure operation of the bank or caused losses to the bank in such a way, the Board shall be authorised to transfer the management and supervision of the bank and the rights of its shareholders, except dividends, to the Fund. 5.     (a)     The Fund, in respect of a bank whose management, supervision and shareholders’ rights, except dividends, are transferred to it under subsection 3 of this provision, taking as a basis the balance sheet to be prepared as of the transfer date, shall be authorised to ... (ab)     take over the losses corresponding to the capital of the bank, provided that the losses do not exceed the savings covered by insurance and all of the shares are acquired ... (b)     The Fund, in respect of a bank whose management, supervision and shareholders’ rights, except dividends, are transferred to it under subsection 4 of this provision shall be entitled to: (ba)     request the return of or compensation for the resources used in the way described in the aforementioned provision or the losses [of the bank] within the periods specified by it and the transfer of the shares [of the bank] to natural and legal persons deemed appropriate by the Board; ... (bc)     request from the domestic courts, without being required to post collateral [to secure the potential losses of the defendant], the imposition of any precautionary measures, including but not limited to the freezing of assets or a ban on persons who are managers, auditors or partners of the bank from leaving the country.” Section 15 “1.     The savings deposits in banks shall be insured by the Savings Deposit Insurance Fund, a public-law body with separate legal personality. The Fund shall be responsible for and authorised to strengthen the financial situation, restructuring and transfer to third parties of banks whose shares and/or management and supervision have been transferred to it and to carry out all other tasks conferred on it by this [Act] ... 3.     The Fund shall be exempt from all types of tax, charges and levies ...” Section 17 “1.     If it is determined that the decisions and transactions of a bank’s board of directors, chairman and members of the credit committee, general managers, assistant general managers and officers whose signatures are binding on the bank have caused the insolvency of the bank, they may be held personally liable for the amount of losses that they caused to the bank and, by virtue of a Board decision and at the request of the Fund, the courts may decide on their personal bankruptcy. If these decisions and transactions are carried out for the benefit of the shareholders of a bank who, directly or indirectly, solely or jointly, hold the management and supervision of that bank, this provision shall apply to the shareholders for the benefits that they acquired ... 2.     This provision shall also apply to the shareholders of the banks whose management, supervision and rights of shareholders, except dividends, have been transferred to the Fund pursuant to [section 14(3) to (5)], who also have been referred to in subsection 1 of this provision, and to employees of the bank referred to in subsection 1 of this provision, who have been responsible for the transactions mentioned in [section 14(3) and (4)], regardless of whether the bank has become insolvent. 3.     The provisions of [section 14(5)(b)] relating to the declaration of assets and injunction measures shall also apply mutatis mutandis to this provision.” Law no. 4672 amending Law no. 4389 86.     The relevant parts of section 15(3) of Law   no.   4389 as amended by Law no. 4672 and section 15(7) added by Law   no. 4672 read as follows: Section 15 “3.     ... As regards the receivables that it has taken over, the Fund shall be authorised to carry out all kinds of transactions, including discount, reaching of a settlement, acquisition of movable and immovable property and all kinds of rights and receivables, without being subject to limitation, and to set these off against the amounts owed to it ... 7.     ... (b)     the amounts due from the use of bank resources and assets by the shareholders of banks whose shares have been partly or wholly transferred to the Fund and who, directly or indirectly, solely or jointly, hold the management and supervision of that bank, or their executives who, through the board of directors, credit committees, branches and other authorised persons or officials or using other means, have acquired or helped third parties to acquire money, property, rights and receivables by way of creating, directly or indirectly, a security interest over the resources and assets of the bank in favour of third parties, showing these as collateral, granting loans to persons who do not have the means to repay, granting loans to secure financing, opening accounts in domestic and foreign banks and financial institutions under the name of deposit or other names or using these accounts as collateral or for other purposes or through other unlawful transactions, shall be considered to be owed to the Fund ...” 87.     Provisional section 1 of Law no. 4672 stipulated that some of the provisions added to Law no. 4389 by Law   no.   4672, including section   15(7), also apply to receivables owed to the Fund in connection with banks whose management, supervision and shareholding rights, except dividends, have been transferred to the Fund prior to the entry into force of Law no. 4672. Law no. 4743 amending Law no. 4389 88.     The relevant part of section 15(3) of Law   no.   4389 as amended by Law no. 4743 provides: Section 15 “3     ... As regards all of its receivables under this [Act], including those which it had taken over or it is tasked and authorised to claim in lawsuits or execution proceedings, the Fund shall be authorised to carry out all kinds of transactions including discount, settlement, acquisition of movable and immovable property and all kinds of rights and receivables, without being subject to limitation, so as to set these off against the amounts owed to it, entering into agreements with debtors, including the rescheduling of repayment of the debt and within the framework of these agreements taking or not taking precautionary measures as per sections 14 and 17 of this [Act], filing or not filing lawsuits or requesting that the courts suspend civil lawsuits already filed for the duration of these agreements ...” Law no. 5411 repealing and replacing Law no. 4389 89.     The relevant parts of Law no. 5411 read as follows: Section 108 “The majority shareholders and executives of banks which have been transferred to the Fund ... shall return and compensate for the resources used as explained in the paragraphs below, as well as the damages arising from such misuse, within the period given by the Fund, without prejudice to the provisions of this [Act] governing personal liability. For the purposes of this provision, the resources and assets of banks used by the majority shareholders and executives of banks, through the board of directors, credit committees, executives, branches and other authorised persons and officials to acquire or help third parties to acquire money, property and any kind of rights and receivables directly or indirectly by way of creating a security interest over the bank’s resources and assets, showing these as collateral, granting loans to persons who do not have any credibility, granting loans to secure financing, opening accounts in domestic and foreign banks and financial institutions under the name of deposit or other names or using these accounts as collateral or for other purposes or through other ways, shall be considered as fraudulently misused resources ...” Section 132 “... As regards the receivables collected by it, the Fund shall be authorised to carry out all kinds of transactions including discount, settlement, selling or buying back, acquisition of movable and immovable property and all kinds of rights and receivables on account of its claim under the conditions specified; entering into agreements with debtors including a new repayment plan for its receivables, applying or not applying precautionary measures in accordance with the principles and procedures to be determined by its board pursuant to the provisions of this [Act] under the agreements it has concluded with the debtors, filing or not filing lawsuits and requesting that the court suspend lawsuits already filed for the duration of those agreements ...” Section 134 “If the Fund considers it useful for the collection of its receivables, it shall be authorised to take over the shareholders’ rights, except for dividends, associated with all and/or some of their shares, and their management and control, ..., of the following regardless of whether these are indebted to the Fund: (a)     the subsidiaries [of a bank transferred to the Fund], (b)     the legal person shareholders holding the majority of the shares of a bank transferred to the Fund, (c)     the companies in which the legal and natural person majority shareholders of a bank transferred to the Fund are majority shareholders, and (d)     the shareholders of companies acting on behalf of the above-listed persons and entities or acquiring funds or rights on their behalf. The Fund ... shall be authorised to sell the shares of companies owned by the persons referred to in this provision and/or licences, permits and all other rights and assets, including rights arising from the temporary frequency utilisation, channel utilisation and concession agreements ... and/or all property owned by these companies or those assets in proportion to the shares taken over by the Fund and to apply the proceeds to set off against its receivables or to pay the debts owed by those companies ... In order to ensure the collection of its receivables, the Fund shall be authorised to bring together the attached assets, the rights arising from licences, permits and concession contracts and all other rights and assets under the contracts that are accessories or inseparable parts of these assets but do not have a separate economic value alone so as to sell these in a manner that will ensure commercial and economic integrity, to sell the attached property even though these are owned by more than one debtor and/or more than one creditor, to establish the payment method and currency of the tender value, the conditions required to be met by buyers, the payment date, other principles and procedures applicable to the tender as well as sale conditions ... , to acquire the commercial and economic unit towards the settlement of the debts owed to the Fund ... The board of the Fund shall set up a sale committee consisting of a minimum of three members to execute the sale process and shall appoint the chairman of the committee ... The estimated value of the commercial and economic unit shall be set by the board of the Fund on the basis of a report to be prepared by the sale committee taking into account the valuation reports prepared by expert persons and entities ... The ranking list for the distribution of the proceeds of the tender shall be prepared by the sale committee ... Other principles and procedures applicable to the sales to be carried out pursuant to this provision shall be set out in a regulation to be issued by the Fund ... The proceeds of the sale of the assets and property of natural and legal persons, either as a commercial and economic unit or separately under this provision, shall be used to repay the outstanding debts of the companies, in the following order: the debts arising ou