Indemnity Claim After Buying a Turkish Company: Notice Requirements and Common Disputes – 2026 Updated Guide

Learn how foreign buyers can pursue an indemnity claim after acquiring a Turkish company, including notice deadlines, covered losses, seller defenses and dispute procedures.

A foreign buyer may discover tax debts, employee claims, bank loans, litigation, financial inaccuracies or related-party transactions after acquiring a Turkish company.

An indemnity claim may allow the buyer to recover these losses from the seller. However, many claims fail because the buyer misses a notice deadline, sends insufficient information or misunderstands the scope of the Share Purchase Agreement.

This 2026 updated guide explains the notice requirements and common disputes arising from indemnity claims after buying a Turkish company.

What Is an Indemnity Claim?

An indemnity is a contractual promise to compensate the buyer for specified losses, liabilities or expenses.

The acquisition agreement may provide indemnity for tax debts, employee claims, undisclosed litigation, bank loans, title defects, environmental liabilities, related-party transactions or breaches of seller warranties.

An indemnity is different from a general warranty. A warranty usually concerns whether a statement was accurate, while an indemnity may allocate a specific financial risk directly to the seller.

What Should the Buyer Do First?

The buyer should review the SPA, indemnity schedule, disclosure documents, closing certificate and all relevant correspondence.

The buyer should identify the event, date of discovery, amount of loss, contractual provision and deadline for giving notice.

The seller should be notified promptly through the exact method required by the agreement. Informal emails may not satisfy a notice clause requiring delivery to a specific address or representative.

What Must an Indemnity Notice Include?

The notice should identify the relevant indemnity or warranty, describe the facts, explain how the liability arose and provide an initial estimate of the loss.

It should include supporting documents such as tax notices, court files, bank records, employment claims, invoices, expert reports or financial calculations.

If the final amount is not yet known, the buyer should explain that the loss is continuing or subject to further assessment and reserve the right to update the claim.

Why Are Notice Deadlines Important?

SPAs often contain specific periods for notifying warranty and indemnity claims. Some agreements require notice within a fixed period after discovery, while others use different survival periods for tax, title or fundamental warranties.

Failure to comply may allow the seller to argue that the claim is time-barred or contractually excluded.

The buyer should calculate deadlines from the wording of the SPA and preserve proof of when the notice was sent and received.

Can the Seller Reject an Incomplete Notice?

The seller may argue that the notice did not identify the legal basis, facts or estimated amount sufficiently.

A short notice may still preserve a claim in some circumstances, but the buyer should provide enough information for the seller to understand the alleged breach and potential exposure.

The buyer should avoid exaggerating the claim or making unsupported allegations that may damage credibility.

What Are the Most Common Indemnity Disputes?

Common disputes concern whether the loss falls within the indemnity, whether the matter was disclosed, whether the buyer knew about it, whether the loss was caused by the seller and whether the buyer mitigated the damage.

The parties may also disagree about caps, baskets, deductibles, exclusions, taxes, interest, legal costs, double recovery and the expiry of the claim period.

The SPA’s definitions and schedules are often more important than general commercial expectations.

Does Disclosure Defeat an Indemnity Claim?

The seller may argue that the liability was disclosed in the data room, financial statements or disclosure schedule.

The buyer should determine whether the disclosure was clear, complete and sufficiently specific. A vague reference to “possible tax issues” may not disclose a substantial assessment or pending enforcement file.

The effect of disclosure depends on the wording of the SPA and the nature of the information provided.

What If the Buyer Knew About the Risk?

Some SPAs exclude claims based on matters known to the buyer before closing.

The seller may argue that the buyer had access to records or was informed during due diligence. The buyer should review meeting notes, data-room documents, legal reports and seller representations.

Knowledge of a general risk is not always the same as knowledge of the specific liability for which indemnity is claimed.

Can the Buyer Claim Future or Contingent Losses?

An indemnity may cover a liability that has not yet been finally assessed or paid, depending on the wording.

The buyer should notify the seller when the risk becomes reasonably identifiable and provide updates as the amount develops.

The SPA may require the buyer to wait until an actual loss occurs, while another agreement may protect contingent liabilities earlier. The contract must be reviewed carefully.

Does the Buyer Have to Mitigate the Loss?

The seller may argue that the buyer failed to reduce or prevent the loss.

The buyer should take reasonable steps to challenge an incorrect tax assessment, defend a lawsuit, negotiate a commercial settlement or prevent additional interest and penalties.

Mitigation does not require the buyer to accept an unreasonable settlement or waive legitimate rights.

Who Controls a Third-Party Claim?

The SPA may determine whether the buyer or seller controls the defense of a tax claim, employee lawsuit, bank demand or commercial action.

The buyer should notify the seller before admitting liability, settling or making a payment if the agreement requires seller participation.

The buyer should also avoid allowing the seller to control the matter in a way that harms the target company or the buyer’s separate interests.

Can the Buyer Claim Legal and Expert Costs?

Legal, accounting, valuation and expert costs may be recoverable if the indemnity or applicable legal rules cover them.

The buyer should maintain invoices, engagement letters, payment records and a clear connection between the professional expense and the indemnified matter.

Unreasonable or unrelated costs may be challenged by the seller.

Can the Buyer Set Off the Claim?

The buyer should not automatically deduct an indemnity claim from another payment unless the SPA expressly permits set-off or the legal requirements are satisfied.

An unauthorized deduction may create a separate payment dispute.

If escrow or retention exists, the buyer should follow the agreed claim-notice and release procedure instead of relying on unilateral withholding.

Can the Seller Be Sued in Turkey?

The answer depends on the governing-law and dispute-resolution clauses. The SPA may provide for Turkish courts, arbitration or another jurisdiction.

The buyer should review service, enforcement, security and asset-location issues if the seller is outside Turkey.

A Turkish court may also be relevant for interim protection, evidence or enforcement of an award.

Can the Acquisition Be Rescinded?

An indemnity claim usually seeks compensation rather than cancellation of the acquisition.

Rescission or termination may be considered in serious cases involving fundamental concealment, fraud or misrepresentation, but it is not automatic.

The buyer should compare the practical value of rescission with damages, indemnity, escrow recovery and price adjustment.

What Evidence Matters in 2026?

In 2026, electronic data rooms, financial models, cloud accounting records, digital tax files, corporate emails and electronic court records may be decisive.

The buyer should preserve original document versions, seller communications, disclosure histories and the date of discovery.

For complex claims, forensic accounting, legal and valuation experts may help calculate the indemnified loss.

Can a Foreign Buyer Act from Abroad?

A foreign buyer does not always need to travel to Turkey. A Turkish lawyer may prepare notices, review the SPA, communicate with the seller and pursue court or arbitration proceedings under a valid power of attorney.

Depending on the issuing country, legalization, apostille and official translation may be required.

Lawyer Fırat Fesih Kaya assists foreign buyers with indemnity claims, warranty disputes, escrow recovery, M&A litigation and commercial arbitration in Turkey.

2026 Legal Considerations

Foreign buyers should maintain a claim calendar covering notice deadlines, warranty survival periods, escrow release dates and dispute procedures.

An indemnity notice should be sent early, accurately and in the form required by the SPA. The buyer should continue preserving evidence and calculating the loss as it develops.

The applicable rules on M&A contracts, indemnities, warranties, damages, arbitration, mediation and procedural deadlines should be reviewed before action is taken.

Frequently Asked Questions (FAQ)

1. What is an indemnity claim after buying a Turkish company?

It is a contractual claim seeking compensation from the seller for specified losses or liabilities covered by the SPA.

2. How quickly must the buyer notify the seller?

The deadline depends on the SPA and may run from discovery, closing or another specified event.

3. What should an indemnity notice contain?

It should identify the contractual provision, facts, estimated loss, supporting documents and continuing rights.

4. Can an incomplete notice preserve the claim?

Sometimes, but an insufficient notice may allow the seller to challenge the claim. The buyer should provide detailed information.

5. Does disclosure defeat an indemnity claim?

It may, if the matter was clearly and sufficiently disclosed under the SPA.

6. Can the buyer claim a loss that has not yet been paid?

Potentially, depending on whether the SPA covers contingent or future liabilities.

7. Must the buyer mitigate the loss?

The buyer should take reasonable steps to reduce or prevent avoidable losses.

8. Can the buyer settle a third-party claim alone?

The buyer should review the SPA because seller consent or participation may be required.

9. Can the buyer deduct the indemnity from another payment?

Only if set-off or withholding is authorized by the SPA or applicable law.

10. Can a foreign buyer pursue indemnity without traveling to Turkey?

In many cases, yes. A Turkish lawyer may act under a valid power of attorney.

This article is provided for general informational purposes only and does not constitute legal advice. We recommend consulting a lawyer about your specific circumstances to avoid any loss of rights.

Expert Legal Support for Foreign Buyers

Indemnity claims are often lost through missed notice deadlines, incomplete claim descriptions or failure to preserve evidence. Prompt SPA review and accurate notification can protect the foreign buyer’s recovery rights.

Fırat Fesih Kaya Law Office provides professional legal support to foreign buyers in indemnity claims, warranty disputes, escrow recovery, M&A negotiations, arbitration and commercial litigation.

Call: +90 312 434 22 22
WhatsApp: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No:221, Yildirim Tower, Balgat, Cankaya, Ankara, Turkey