Abstract:

Since the possession of a pledged chattel is required to be transferred to the pledgor for the purpose of establishment of pledge over chattel under Turkish Civil Code (Article 939-949 of the TCC), the rule requiring the delivery of the chattel in pledge to the pledge can be abandoned in exceptional circumstances only (Article 939/I, 940, 970 of the TCC). As a result of the fact that Turkish Civil Code required the transfer of possession for pledge of chattels, the chattel in pledge cannot stay under the pledgor’s domination and such chattel in pledge cannot be used by the pledgor. Failure to comply with this rule would lead to non-creation of the pledge (Article 939/III of the TCC). The pledgor’s inability to benefit from the pledged chattel has been a common obstacle for the use of pledge of chattel subject to transfer of possession especially in commercial transactions. In this respect, the legislator has also accepted the necessity of the pledgor’s use of the pledged chattel after the establishment of pledge as well as obtaining the required financing in order to repay the debt that is secured by the pledge. In addition to articles 940 and 979 of the TCC relating to pledge of chattels under a registry and without transfer of possession, firstly the Commercial Enterprise Pledge Law numbered 1447 and after its abolishment, the Law numbered 6750 on Pledge of Chattel in Commercial Transactions have set out a new legal regime relating to pledge of chattel under a registry and without transfer of possession. In our study, the latest amendments to the Law numbered 6750 on Pledge of Chattel in Commercial Transactions and the pledgor’s rights under these amendments will be analyse with a particular focus on the pledgor’s authority to dispose the pledged chattel and its consequences under Turkish Property Law.

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