Fiduciary transactions and statute of limitations in fiduciary transactions

Abstract

There is no comprehensive regulation addressing fiduciary transactions in Turkish law. Fiduciary transactions, which have been the subject of numerous decisions of the Court of Cassation, do not have a definitive definition accepted in legal doctrine. In Turkish law, a fiduciary transaction is a type of contract whereby the trustor transfers a right to the trustee for a definite purpose or period, and the trustee undertakes to use this right in accordance with the instructions and directives of the trustor and to re-transfer the right once the purpose is fulfilled or the period expires. Two main problems generally arise in fiduciary transactions: the problem of proof and the problem of limitation periods. However, academic works addressing the issue of limitation periods are quite limited, and this deficiency constitutes the subject of this study. Due to the absence of a special regulation, the recovery of the entrusted subject matter from the trustee is resolved within the framework of the general provisions of the Turkish Code of Obligations. Nevertheless, the main issue lies in determining the starting point of the limitation period. The practice of first-instance courts, which apply the ten-year limitation period pursuant to Article 146 of the Turkish Code of Obligations and take the date of the fiduciary transaction as the starting point, leads to significant legal injustices. In this article, the structure of fiduciary transactions is examined, and the issue of limitation periods is analyzed.