Turkish Company Moves Assets During International Arbitration: Interim Protection for Foreign Claimants 2026 Updated Guide

A Turkish company transfers assets while international arbitration is pending. Learn how foreign claimants can seek interim protection, precautionary attachment, injunctions, evidence preservation and enforcement measures in Turkey.

A foreign company may win an international arbitration and still face a serious commercial problem: the Turkish counterparty may have transferred, concealed, encumbered or otherwise moved its assets before the award can be enforced. Warning signs can include unusual transfers to shareholders or related companies, rapid real estate sales, disposal of machinery, movement of receivables, new mortgages, transfers of shares or unexplained depletion of bank accounts. In this situation, waiting for the final arbitral award may significantly reduce the practical value of the proceedings. Foreign claimants should therefore examine whether Turkish law permits interim judicial protection, precautionary attachment, injunctions, preservation of evidence and later challenges against asset transfers while arbitration continues.

Why Asset Movement During Arbitration Is a Serious Risk

International arbitration can continue for months or years. During that period, the respondent may remain free to conduct ordinary business. However, a different issue arises when transactions appear designed to make future enforcement impossible or substantially more difficult.

The claimant should distinguish legitimate commercial activity from transactions indicating asset dissipation.

Arbitration Does Not Automatically Freeze Assets in Turkey

Commencing arbitration does not normally create an automatic freeze over the respondent’s Turkish property, bank accounts or receivables.

If protection is necessary, the claimant generally needs to pursue an appropriate interim remedy through the arbitral tribunal, Turkish courts or both, depending on the circumstances and applicable arbitration framework.

Act Before the Assets Disappear

Speed is critical. If valuable property has already been sold and proceeds have passed through several entities, recovery may become considerably more complicated.

Foreign claimants should begin asset and enforcement planning before the arbitration reaches its final stage.

What Are the Warning Signs of Asset Dissipation?

Potential warning signs include rapid property transfers, unusual payments to shareholders, sales to related companies, sudden mortgages, transfer of business operations to another entity, disposal of essential machinery, assignment of receivables and substantial unexplained reductions in company assets.

No single transaction necessarily proves fraudulent intent. The complete commercial context should be examined.

Precautionary Attachment May Be Considered

For qualifying monetary claims, precautionary attachment can be an important Turkish-law mechanism for protecting future recovery.

Its purpose is not to provide the claimant with final payment before judgment or award. Rather, it can preserve assets against the risk that subsequent enforcement becomes ineffective.

Arbitration Does Not Necessarily Prevent Court-Ordered Interim Protection

The existence of an arbitration agreement should not automatically be understood to mean that every interim-protection application must be made exclusively to the arbitral tribunal.

Depending on the applicable arbitration law, arbitration agreement and requested measure, Turkish courts may retain an important role in interim protection.

Precautionary Attachment and Preliminary Injunction Are Different

These remedies should not be treated as interchangeable.

Precautionary attachment is primarily associated with securing monetary claims, whereas preliminary injunctions can be relevant where temporary regulation or preservation of a particular legal or factual situation is required.

Selecting the wrong remedy can waste valuable time.

What Must the Foreign Claimant Show?

The precise requirements depend on the remedy sought. The claimant should be prepared to establish the underlying claim and the circumstances justifying urgent protection to the degree required for interim proceedings.

The arbitration agreement, underlying contract, payment documents, notices, correspondence and evidence concerning suspicious asset movements should be organized immediately.

Evidence of Asset Dissipation Is Important

Where the application relies on a risk that enforcement will be frustrated, specific evidence is much stronger than general concern.

Documents showing related-party transfers, disposal of substantial assets, unusual corporate restructuring or attempts to remove property can strengthen the factual basis of an application.

Do Not Wait for Conclusive Proof of Fraud

Interim proceedings exist precisely because the claimant may need protection before the entire dispute is finally determined.

The claimant should nevertheless avoid unsupported allegations and present concrete facts demonstrating the urgency.

Can Turkish Bank Accounts Be Protected?

Depending on the remedy granted and the circumstances, bank assets may potentially become relevant to interim enforcement measures.

The application should be carefully structured according to the nature of the claim and the relief legally available.

Real Estate Can Be Particularly Important

If the Turkish respondent owns valuable land, offices, factories or other real estate, title records should be reviewed promptly.

Recent transfers, mortgages or other encumbrances can reveal whether the company’s asset position is changing during arbitration.

Machinery and Commercial Assets Should Also Be Reviewed

For manufacturing businesses, machinery, vehicles, inventory and other movable assets may constitute significant enforcement value.

Foreign claimants should avoid focusing solely on real estate.

Receivables Can Be Valuable Assets

A Turkish company may have substantial receivables from customers even where its bank balance appears limited.

The enforcement strategy should therefore consider the respondent’s broader commercial relationships and identifiable third-party receivables.

Shareholdings May Also Matter

The respondent may own shares or participation interests in other companies. Corporate holdings can therefore form part of the asset analysis where legally relevant and attachable.

Related-Party Transfers Require Close Examination

Transfers to shareholders, directors, family members or affiliated companies shortly before or during arbitration may justify further investigation.

The fact that parties are related does not automatically invalidate a transaction, but timing, consideration and commercial purpose can become important.

Selling Assets Below Market Value Can Be a Warning Sign

A substantial asset transferred for apparently inadequate consideration may raise questions concerning whether the transaction was commercially genuine.

Preserve valuation information and transaction records where available.

New Mortgages and Security Interests Should Be Investigated

A company anticipating an adverse award may potentially increase secured debt or grant security over valuable assets.

The claimant should determine when the security was created, in whose favor and whether an underlying commercial obligation genuinely exists.

Asset Transfers Do Not Automatically Defeat the Claim

The fact that the respondent transfers property does not eliminate the arbitration claim itself.

The problem is enforcement: an award against a company with no accessible assets may have limited practical value.

Can Transfers Be Challenged Later?

Certain asset transfers may potentially become subject to separate avoidance or enforcement-related remedies where the legal requirements are satisfied.

The availability of such remedies depends heavily on the nature, timing, parties and purpose of the transaction.

A Transfer to an Affiliate Is Not Automatically Void

Foreign claimants should avoid assuming that every intra-group transfer is fraudulent.

The legal analysis should consider consideration paid, ordinary business purpose, timing and the respondent’s financial condition.

Corporate Separateness Remains Important

A claimant cannot automatically enforce an award against the assets of a shareholder, director, sister company or parent merely because those parties are economically connected.

Separate legal personality remains a fundamental consideration.

Can Shareholders Become Personally Liable?

Personal liability requires an independent legal basis. Ownership of the respondent company alone generally should not be treated as sufficient to make a shareholder personally responsible for the company’s arbitral debt.

Different considerations can arise where there are personal guarantees, independent wrongdoing or other legally recognized grounds.

Directors Should Not Automatically Be Treated as Debtors

Likewise, a director does not become personally liable merely because the company is involved in arbitration.

However, separate conduct by directors surrounding unlawful transactions may require independent analysis.

Preserve Corporate Records

Commercial registry records, shareholder changes, capital transactions and management changes can help reconstruct what occurred during the arbitration period.

A chronological corporate map can be particularly useful in complex asset-dissipation cases.

Build an Asset Timeline

Create a timeline showing the commencement of the dispute, notices of breach, arbitration filing, major procedural events and significant asset transactions.

Timing can help demonstrate whether transfers were part of ordinary business or emerged only after the dispute became serious.

Preserve Contractual Evidence

The claimant should maintain the underlying agreement, amendments, invoices, delivery records, correspondence, termination notices, payment demands and arbitration documents.

These materials may be necessary to demonstrate the prima facie basis of the monetary claim.

Preserve Evidence of the Respondent’s Knowledge

Evidence showing that the respondent knew about the claim before transferring substantial assets can become important.

Arbitration notices, demand letters and settlement correspondence may help establish the chronology.

Can the Arbitral Tribunal Order Interim Measures?

Depending on the arbitration rules, seat of arbitration and applicable law, the tribunal may have authority to grant interim measures.

However, the practical enforceability of a tribunal-ordered measure against assets or third parties in Turkey should be evaluated separately.

Emergency Arbitrator Procedures May Be Relevant

Some institutional arbitration rules provide emergency-arbitrator mechanisms before the tribunal is fully constituted.

Whether this is the most effective route depends on the arbitration agreement, institutional rules and location of the assets.

Turkish Court Assistance Can Be Crucial

Where assets are located in Turkey, court assistance may become important even if the arbitration itself is seated abroad.

Foreign claimants should therefore integrate Turkish enforcement strategy with the international arbitration strategy from an early stage.

Security May Be Required

Interim measures can involve security requirements depending on the remedy and procedural framework.

The claimant should anticipate this possibility when planning an urgent application.

Interim Protection Is Not the Final Decision

Obtaining precautionary protection does not mean that the claimant has won the arbitration.

The merits of the contractual dispute remain for determination in the arbitration.

Avoid Excessive Interim Applications

An application should be proportionate to the legitimate enforcement risk.

Attempting to immobilize assets vastly exceeding the disputed claim can create procedural and strategic difficulties.

Confidentiality and Evidence Need Careful Coordination

International arbitration may contain confidentiality obligations, while a Turkish court application may require submission of arbitration-related evidence.

The claimant should determine how necessary evidence can be presented without unnecessarily disclosing confidential material.

Foreign-Language Documents May Need Proper Preparation

Contracts, arbitration requests, tribunal orders and financial documents may need translation or other formal preparation for use before Turkish authorities or courts.

Planning this in advance can prevent delay in urgent proceedings.

What If the Turkish Company Transfers Assets After an Interim Order?

A violation of a binding judicial measure can create substantially different legal consequences from an ordinary commercial transfer made before protection was ordered.

The exact order and subsequent conduct should be documented immediately.

Final Award Enforcement Should Be Planned Early

Interim protection should form part of a broader enforcement strategy.

Before the final award arrives, the claimant should understand where the respondent’s assets are located, which assets are encumbered and what procedural steps will be necessary for recognition or enforcement where applicable.

Foreign Arbitral Awards May Require Recognition or Enforcement

Where the award is foreign, enforcement in Turkey can involve the applicable international convention and Turkish arbitration/enforcement framework.

The claimant should prepare the enforcement file while arbitration is still progressing rather than starting from zero after receiving the award.

Asset Preservation and Award Enforcement Are Different Proceedings

A claimant should distinguish the temporary protection of assets from the eventual process of enforcing the final award.

Success in one stage does not automatically determine the other.

Parallel Proceedings Require Coordination

A dispute may involve arbitration, interim Turkish court proceedings, enforcement measures and later actions concerning suspicious transfers.

All proceedings should follow a consistent factual and legal strategy.

Avoid Contradictory Positions

Arguments made in the arbitration should be reviewed before filing interim applications in Turkey.

Inconsistencies concerning the amount of the claim, contractual rights or respondent’s conduct can weaken credibility.

Consider Settlement Leverage Carefully

Effective asset protection may significantly alter settlement dynamics.

However, interim measures should be pursued for legitimate protective purposes rather than as improper commercial pressure.

What If the Respondent Is Already Insolvent?

If the Turkish company is experiencing serious financial distress, insolvency and restructuring issues may affect the usefulness and priority of particular enforcement measures.

The claimant should investigate the company’s broader creditor position.

Existing Secured Creditors Matter

A claimant discovering valuable property should not assume that the entire value will be available for enforcement.

Mortgages, pledges, public debts and other priority claims may materially reduce recoverable value.

Conduct Asset Due Diligence Before Major Applications

Before incurring substantial costs, identify the respondent’s known assets and existing encumbrances as far as legally possible.

This allows interim applications to target assets with realistic enforcement value.

International Groups Require a Multi-Jurisdictional Strategy

A Turkish respondent may have assets abroad while foreign affiliates hold assets in Turkey.

The claimant should distinguish which company is legally liable and where that company’s assets are located.

Arbitration enforcement planning may therefore require coordinated action in several jurisdictions.

Immediate Action Plan for Foreign Claimants

When a Turkish company appears to be moving assets during international arbitration, the foreign claimant should immediately preserve evidence of transfers, prepare an asset map, review Turkish real estate and corporate information where available, identify bank accounts and commercial receivables where legally possible, analyze whether precautionary attachment or another interim measure is appropriate, coordinate any tribunal or emergency-arbitrator application with Turkish court strategy, preserve evidence of related-party transactions, review existing security interests and prepare the future award-enforcement strategy without waiting for the final hearing.

Frequently Asked Questions

Does starting international arbitration automatically freeze a Turkish company’s assets?

No. Arbitration itself does not ordinarily create an automatic freeze over the respondent’s assets in Turkey.

Can a foreign claimant seek precautionary attachment in Turkey?

Potentially, where the legal requirements for the relevant remedy are satisfied. The arbitration agreement and procedural framework should be analyzed together with the requested measure.

Can Turkish courts assist even if arbitration is seated abroad?

Potentially. The location of assets and nature of the requested interim protection can make Turkish court assistance important even in foreign-seated arbitration.

Can real estate be protected during arbitration?

Potentially, depending on the nature of the claim and remedy granted. Title and encumbrance information should be investigated promptly.

Can the claimant freeze the shareholder’s personal assets?

Not merely because the shareholder owns the respondent company. A separate legal basis for personal liability would generally be necessary.

What if assets are transferred to a related company?

The transaction should be investigated. A related-party transfer is not automatically invalid, but its timing, consideration and commercial purpose may become important.

Can the arbitral tribunal itself order interim protection?

Depending on the applicable arbitration rules and law, the tribunal may have interim-measure powers. Practical enforcement against Turkish assets should be evaluated separately.

Should the claimant wait until the award before searching for assets?

Usually this creates unnecessary enforcement risk. Asset mapping and enforcement planning can begin while arbitration remains pending.

Can suspicious asset transfers be challenged after the award?

Potentially, if the requirements of the applicable Turkish-law remedy are satisfied. The facts and timing of each transaction are critical.

What is the most important step when assets begin disappearing?

Act quickly and preserve evidence. The claimant should simultaneously map assets, document suspicious transactions and evaluate the appropriate Turkish interim-protection mechanism before the respondent’s remaining enforcement value disappears.

Client-Focused Legal Support for International Arbitration and Asset Protection in Turkey

International arbitration can lose much of its commercial value if the respondent disposes of assets before enforcement. Fırat Fesih Kaya Law Office assists foreign companies and international investors with Turkish-law issues involving interim protection, precautionary attachment, asset preservation, suspicious asset transfers, recognition and enforcement of foreign arbitral awards and related enforcement proceedings. Lawyer Fırat Fesih Kaya provides legal assistance in coordinating Turkish interim measures with ongoing international arbitration and developing an enforcement strategy focused on preserving practical recovery.

Phone: +90 312 434 22 22

Mobile: +90 532 769 22 22

Email: info@firatfesihkaya.av.tr

Address: Mevlana Boulevard No:221, Yıldırım Tower, Office No:148, 06520 Balgat, Çankaya, Ankara, Turkey