Papers by Cem Veziroğlu
The Climate Crisis and Private Companies: How to Address the Sustainability Arbitrage Problem
European Business Organization Law Review

Buy-Out of the Oppressed Minority’s Shares in Joint Stock Companies: A Comparative Analysis of Turkish, Swiss and English Law
European Business Organization Law Review, Feb 7, 2018
Article 531 of the Turkish Commercial Code grants the right to request corporate dissolution for ... more Article 531 of the Turkish Commercial Code grants the right to request corporate dissolution for just causes to shareholders representing at least 10% of the capital in joint stock companies, and 5% in publicly traded companies. In addition to dissolution, the court can order purchase of the claimant’s shares at real value (buy-out remedy) or adopt a different solution. This article conducts an economic analysis of the buy-out remedy against minority oppression and compares Turkish law with Swiss and English legislation. The buy-out remedy is supposed to provide an ex post control on the controller’s conduct, and it is expected to function as a put option conditional upon oppression. However, the current provision does not provide the expected incentives. Addressing this issue, I suggest that: (1) the relief sought by the claimant should be taken into account; (2) the purchaser of the claimant’s shares should be the oppressive controller, rather than the company in question; (3) the standard of ‘just cause’ to be proven should not be equal for each remedy, and thus, the courts should be able to give a buy-out order even if the facts do not justify corporate dissolution; (4) dissolution orders should not be given in cases where there is a going-concern value to protect; and finally, (5) the valuation of the claimant’s shares should, in principle, be made on a going concern and pro rata basis, and any depreciation of the claimant’s shares due to the controller’s abusive conducts should be taken into account.

Arbitration of Corporate Law Disputes in Joint Stock Companies under Turkish Law: A Comparative Analysis
Social Science Research Network, Sep 27, 2018
This study addresses the arbitrability of corporate law disputes and the validity of arbitration ... more This study addresses the arbitrability of corporate law disputes and the validity of arbitration clauses stipulated in the articles of association (AoA) of joint stock companies, and compares Turkish law with German and Swiss jurisdictions in particular. While corporate law disputes are considered arbitrable, disputes concerning invalidity of corporate decisions and actions for dissolution are heavily debated. The paper argues that both types of disputes are arbitrable, albeit judicial dissolution requests accommodate practical hurdles. It is also argued that arbitral awards should be granted the erga omnes effect, as long as the interested third parties are provided with the necessary procedural protection. Furthermore, arbitration clauses can be validly stipulated in the AoA of privately held joint stock companies. However, the binding effect of the arbitration clause in question depends on its legal nature, namely, korporative or formell. Addressing this issue, the paper proposes to adopt a two-step test. Finally, it suggests practicable legislative recommendations and a model arbitration clause in order to enable and facilitate arbitration in corporate law disputes.
Ortaklık Teorileri Çerçevesinde Esas Sözleşme Özgürlüğünün Ekonomik Analizi (Economic Analysis of Contractual Freedom in Articles of Association)
Social Science Research Network, May 9, 2021

DergiPark (Istanbul University), Oct 26, 2018
Pursuant to Turkish Commercial Code ("TCC") Article 380 paragraph 1, "[L]egal transactions conclu... more Pursuant to Turkish Commercial Code ("TCC") Article 380 paragraph 1, "[L]egal transactions concluded between the company and another person for acquisition of its shares and the subject of which is granting of advance, loan or security, shall be null and void." According to this provision, a public company cannot provide financial assistance to a third party with a view to acquiring its shares. This article examines a target company's dividend payout or commitment to its buyer (who would be a shareholder following an acquisition of the target company's shares) that is financed by a bank loan or from its retained earnings (i.e., without using any external source). We ask whether use of such funds in acquisition finance constitute "financial assistance" in the meaning of TCC 380/1. According to TCC, the prohibition of financial assistance applies only if three conditions exist cumulatively: (1) There must be an acquisition of shares; (2) there must be a financial assistance transaction, and (3) financial assistance must be made for the acquisition of shares. Therefore, the aforementioned transactional mechanism must be filtered through these three conditions. In our view, dividend payouts or commitments to the buyer following her share acquisition does not violate the prohibition of financial assistance, regardless of whether such amount is funded by a bank loan or the company's retained earnings. Using profits distributed by the target company in order to finance the acquisiton of the target company's shares makes no differrence according to our analysis. It is also possible that a commitment may be given for the target company's dividend payout in certain periods and for certain amounts in order to ensure repayment of the credit provided for the acquisition. The obligor of the said commitment may be the buyer or the target company (as a legal entity). If the target company is the obligor, the consequences for violating the commitment will vary according to the modality of the undertaking. Nonetheless, we believe that the target company's dividend payout must be made in compliance with the rules and procedures laid down by the TCC and by the company's articles of association. Otherwise, in addition to sanctions with respect to distribution of profit (TCC 512), the prohibition of financial assistance may step in. Hence, both the general assembly's resolution towards dividend payout and the payment of dividend (act of disposal) may be considered null and void regardless of whether the buyer's receipt of the dividend was wrongful and in bad faith.
Anonim Ortaklık Esas Sözleşmesinde Düzenlenen Tahkim Şartının Geçerliliği (Validity of Arbitration Clauses Stipulated in the Articles of Associations of Joint-Stock Companies)
Social Science Research Network, 2023

İstanbul Ticaret Sicil Müdürlüğü'nde Tescil Edilen İlk Esas Sözleşmesel Tahkim Şartına İlişkin Tespitler (Reflections on the First Arbitration Clause In Articles of Association Registered at Istanbul Trade Registry)
Social Science Research Network, 2023
The validity of arbitration clauses stipulated in joint stock companies’ articles of association ... more The validity of arbitration clauses stipulated in joint stock companies’ articles of association has been a controversial issue under Turkish law. Legal uncertainties have limited its application albeit there has been a growing need to settle corporate law disputes before arbitration. Due to such uncertainties, companies abstain from incorporating and registering arbitration clause in their articles since it requires trade registry’s approval which has been a blind spot until now. This case analysis gives insight to the first arbitration clause registered before the Istanbul Trade Registry on 28 October 2021. It provides observations on the trade registry’s reactions to statutory arbitration clauses, and sheds light upon the extent of its permissible content. This tested arbitration clause paves the way for future clauses to be included in the company articles and stands as a reference point. We expect that arbitration clauses written in articles of associations to become a market practice in the near future, especially for foreign investors.

Hedef Anonim Ortaklığın Kâr Dağıtımı ve Bu Yöndeki Taahhüdü Finansal Yardım Yasağını (TTK380/1) İhlal Eder Mi? (Do Dividend Distributions and Dividend Commitments of a Target Company Violate the Prohibition of Financial Assistance (TCC Article 380/1)?)
Social Science Research Network, Apr 17, 2018
6102 sayili Turk Ticaret Kanunu’nun (“TTK”) 380. maddesinin 1. fikrasi uyarinca “[P]aylarinin ikt... more 6102 sayili Turk Ticaret Kanunu’nun (“TTK”) 380. maddesinin 1. fikrasi uyarinca “[P]aylarinin iktisap edilmesi amaciyla, sirketin baska bir kisiyle yaptigi, konusu avans, odunc veya teminat verilmesi olan hukuki islemler batildir”. Anilan hukum, paylari ucuncu kisi tarafindan iktisap edilen anonim ortakligin aliciya finansal yardimda bulunmasini yasaklamaktadir. Isbu makalede inceledigimiz husus hedef anonim ortakligin bir bankadan kredi temin etmesinin ardindan soz konusu meblagi, yahut dis finansman kullanmaksizin birikmis kârini, sirketin paylarini iktisap ederek pay sahibi sifatini kazanan aliciya kâr dagitimi yoluyla aktarmasi ve bu kaynagin devralma isleminin finansmaninda kullanilmasinin TTK 380/1 anlaminda “finansal yardim” sayilip sayilmayacagidir. Finansal yardim yasaginin uygulama alani bulabilmesi icin su uc sartin bir arada bulunmasi gerekmektedir. Bunlar; (1) pay iktisabi, (2) finansal yardim islemi ve (3) finansal yardimin alicinin pay iktisabi amaciyla yapilmasidir. O halde yukarida aciklanan islem orgusu de bu uc sartin suzgecinden gecirilmelidir. Kanimizca bir bankanin anonim ortakliga kredi temin etmesi ve soz konusu kredinin, anonim ortakligin paylarini iktisap ederek pay sahibi sifatini kazanan aliciya kâr dagitimi yoluyla aktarilmasi, yahut zaten hedef sirketin malvarligina dâhil olan mevcut kaynagin kâr dagitimi suretiyle aliciya tahsis edilmesi TTK 380/1’de duzenlenen finansal yardim yasaginin kapsamina girmemektedir. Ulastigimiz bu sonuc acisindan, hedef sirketin nakit ihtiyaci sebebiyle bankanin saglayacagi kredi neticesinde hedef sirketin dagitacagi kârin, yine hedef sirketin paylarinin iktisabi amaciyla kullanilacak olmasi da hicbir fark yaratmamaktadir. Ayni sekilde, hedef sirketin paylarinin iktisabinin ve bunun finansmani icin saglanan kredinin geri odenmesini teminen, hedef sirketin belirli sureler icinde ve belirli oranlarda kâr dagitimi yapacagina dair bir taahhudun verilmis olmasi da mumkundur. Soz konusu taahhudun yukumlusu alici olabilecegi gibi, hedef sirket tuzel kisiligi de olabilir. Yukumlulugun sirket uzerinde olmasi seklindeki ikinci ihtimalde taahhude aykiriligin sonuclari, taahhudun verilis sekline gore degisiklik gosterecektir. Ancak bunun icin, hedef sirket nezdinde yapilacak kâr dagitiminin TTK ve esas sozlesmede ongorulen usul ve esaslara riayet edilerek gerceklestirilmesi gerekmektedir. Aksi hâlde hedef sirket tarafindan pay sahibine yapilacak malvarligi aktarimina iliskin kâr dagitimini duzenleyen hukumlerde ongorulen yaptirimlara (TTK 512) ek olarak, finansal yardim yasaginin da uygulanmasi riski dogabilecektir. Keza bu durumda pay sahibi konumundaki alicinin, kâr payini haksiz yere ve kotu niyetle alip almadigina bakilmaksizin, hem genel kurulun kâr payi dagitim karari hem de tasarruf islemi niteligindeki hedef sirketin temettu odeme islemleri kesin hukumsuz sayilabilecektir.
Social Science Research Network, 2017
The Sustainability Arbitrage Problem and Regulation of Private Companies
Social Science Research Network, 2022
Anonim Ortaklık Esas Sözleşmesinde Düzenlenen Tahkim Şartının Geçerliliği (Validity of Arbitration Clauses Stipulated in the Articles of Associations of Joint-Stock Companies)
Social Science Research Network, 2023

İstanbul Ticaret Sicil Müdürlüğü'nde Tescil Edilen İlk Esas Sözleşmesel Tahkim Şartına İlişkin Tespitler (Reflections on the First Arbitration Clause In Articles of Association Registered at Istanbul Trade Registry)
SSRN Electronic Journal, 2021
The validity of arbitration clauses stipulated in joint stock companies’ articles of association ... more The validity of arbitration clauses stipulated in joint stock companies’ articles of association has been a controversial issue under Turkish law. Legal uncertainties have limited its application albeit there has been a growing need to settle corporate law disputes before arbitration. Due to such uncertainties, companies abstain from incorporating and registering arbitration clause in their articles since it requires trade registry’s approval which has been a blind spot until now. This case analysis gives insight to the first arbitration clause registered before the Istanbul Trade Registry on 28 October 2021. It provides observations on the trade registry’s reactions to statutory arbitration clauses, and sheds light upon the extent of its permissible content. This tested arbitration clause paves the way for future clauses to be included in the company articles and stands as a reference point. We expect that arbitration clauses written in articles of associations to become a market practice in the near future, especially for foreign investors.
Ortaklık Teorileri Çerçevesinde Esas Sözleşme Özgürlüğünün Ekonomik Analizi
Ticaret Hukukunda Genç Yaklaşımlar, May 9, 2021

Arbitration of Corporate Law Disputes in Joint Stock Companies under Turkish Law: A Comparative Analysis
European Company and Financial Law Review, 2018
This study addresses the arbitrability of corporate law disputes and the validity of arbitration ... more This study addresses the arbitrability of corporate law disputes and the validity of arbitration clauses stipulated in the articles of association (AoA) of joint stock companies, and compares Turkish law with German and Swiss jurisdictions in particular. While corporate law disputes are considered arbitrable, disputes concerning invalidity of corporate decisions and actions for dissolution are heavily debated. The paper argues that both types of disputes are arbitrable, albeit judicial dissolution requests accommodate practical hurdles. It is also argued that arbitral awards should be granted the erga omnes effect, as long as the interested third parties are provided with the necessary procedural protection. Furthermore, arbitration clauses can be validly stipulated in the AoA of privately held joint stock companies. However, the binding effect of the arbitration clause in question depends on its legal nature, namely, korporative or formell. Addressing this issue, the paper proposes...

Arbitrability of Disputes Arising from Joint Stock Company Law
SSRN Electronic Journal
While only contractual claims may be requested in arbitral proceedings carried out in accordance ... more While only contractual claims may be requested in arbitral proceedings carried out in accordance with shareholders’ agreements (“SHA”), it is not always possible to prevent claims peculiar to corporate law, such as invalidity of general assembly and board resolutions, action for dissolution and directors’ liability, from being asserted in local courts. Hence, contradicting judgments may be given in these parallel proceedings. For this reason, the rights and obligations stipulated in the SHA are carried into the articles of association (“AoA”) in order to make these mechanisms applicable on corporate level as well. However, the validity of a statutory arbitration clause in the AoA entails a series of issues both in terms of arbitration law and corporate law. This paper addresses the validity of an arbitration clause in the AoA of a joint stock company in respect of arbitrability under Turkish law, and it compares it with German and Swiss jurisdictions in order to propose practical solutions. Our proposal are: (i) the availability and conditions to stipulate an arbitration clause in the AoA should be clearly regulated, (ii) supplementary rules of arbitration that take problems specific to corporate law disputes into consideration should be adopted and (iii) a model arbitration clause referring to the above-mentioned rules should be prepared and published by ISTAC.

Buy-Out of the Oppressed Minority’s Shares in Joint Stock Companies: A Comparative Analysis of Turkish, Swiss and English Law
European Business Organization Law Review
Article 531 of the Turkish Commercial Code grants the right to request corporate dissolution for ... more Article 531 of the Turkish Commercial Code grants the right to request corporate dissolution for just causes to shareholders representing at least 10% of the capital in joint stock companies, and 5% in publicly traded companies. In addition to dissolution, the court can order purchase of the claimant’s shares at real value (buy-out remedy) or adopt a different solution. This article conducts an economic analysis of the buy-out remedy against minority oppression and compares Turkish law with Swiss and English legislation. The buy-out remedy is supposed to provide an ex post control on the controller’s conduct, and it is expected to function as a put option conditional upon oppression. However, the current provision does not provide the expected incentives. Addressing this issue, I suggest that: (1) the relief sought by the claimant should be taken into account; (2) the purchaser of the claimant’s shares should be the oppressive controller, rather than the company in question; (3) the standard of ‘just cause’ to be proven should not be equal for each remedy, and thus, the courts should be able to give a buy-out order even if the facts do not justify corporate dissolution; (4) dissolution orders should not be given in cases where there is a going-concern value to protect; and finally, (5) the valuation of the claimant’s shares should, in principle, be made on a going concern and pro rata basis, and any depreciation of the claimant’s shares due to the controller’s abusive conducts should be taken into account.
Türkiye'de Sosyal Girişimciliğin Hukuki Statüsü: İhtiyaçlar ve Öneriler (Legal Status of Social Entrepreneurship in Turkey: Needs and Recommendations)
SSRN Electronic Journal

İstanbul Hukuk Mecmuası, Feb 19, 2020
Pursuant to Turkish Commercial Code ("TCC") Article 380 paragraph 1, "[L]egal transactions conclu... more Pursuant to Turkish Commercial Code ("TCC") Article 380 paragraph 1, "[L]egal transactions concluded between the company and another person for acquisition of its shares and the subject of which is granting of advance, loan or security, shall be null and void." According to this provision, a public company cannot provide financial assistance to a third party with a view to acquiring its shares. This article examines a target company's dividend payout or commitment to its buyer (who would be a shareholder following an acquisition of the target company's shares) that is financed by a bank loan or from its retained earnings (i.e., without using any external source). We ask whether use of such funds in acquisition finance constitute "financial assistance" in the meaning of TCC 380/1. According to TCC, the prohibition of financial assistance applies only if three conditions exist cumulatively: (1) There must be an acquisition of shares; (2) there must be a financial assistance transaction, and (3) financial assistance must be made for the acquisition of shares. Therefore, the aforementioned transactional mechanism must be filtered through these three conditions. In our view, dividend payouts or commitments to the buyer following her share acquisition does not violate the prohibition of financial assistance, regardless of whether such amount is funded by a bank loan or the company's retained earnings. Using profits distributed by the target company in order to finance the acquisiton of the target company's shares makes no differrence according to our analysis. It is also possible that a commitment may be given for the target company's dividend payout in certain periods and for certain amounts in order to ensure repayment of the credit provided for the acquisition. The obligor of the said commitment may be the buyer or the target company (as a legal entity). If the target company is the obligor, the consequences for violating the commitment will vary according to the modality of the undertaking. Nonetheless, we believe that the target company's dividend payout must be made in compliance with the rules and procedures laid down by the TCC and by the company's articles of association. Otherwise, in addition to sanctions with respect to distribution of profit (TCC 512), the prohibition of financial assistance may step in. Hence, both the general assembly's resolution towards dividend payout and the payment of dividend (act of disposal) may be considered null and void regardless of whether the buyer's receipt of the dividend was wrongful and in bad faith.
Publications by Cem Veziroğlu
Ticaret Hukukunda Genç Yaklaşımlar, 2021
Hukuk, normatif bir bilim dalı olması nedeniyle, düzenlediği alana dair çeşitli aksiyom ve varsay... more Hukuk, normatif bir bilim dalı olması nedeniyle, düzenlediği alana dair çeşitli aksiyom ve varsayımlar üzerine kuruludur 1. Ortaklıklar hukuku da ortaklığın varoluş sebebi, amaçları, organizasyonel yapısı ve ortaklık bünyesindeki ilişkilere dair önermelere dayanır. Ortaklıkların temeline ilişkin bu sorunlar ise ortaklık teorilerinin araştırma konularını oluşturur 2. Bu nedenle ortaklıklar hukuku, kaçınılmaz olarak ortaklık teorileri üzerinde yükselir 3. Ortaklık teorilerinin bizatihi düşünsel bir * Ortaklık ve ortaklıklar hukuku teorileri ile esas sözleşme özgürlüğünün ekonomik analizine ilişkin bu incelemeyi de içeren daha kapsamlı bir çalışma için bkz. Cem Veziroğlu,

Arbitration of Corporate Law Disputes in Joint Stock Companies under Turkish Law: A Comparative Analysis
Global Relations Forum - Young Academics Program Policy Paper Series, 2019
This paper addresses the arbitrability of corporate law disputes and the validity of arbitration ... more This paper addresses the arbitrability of corporate law disputes and the validity of arbitration clauses provided in the articles of association (AoA) of joint stock companies. Turkish law is compared with various jurisdictions, while a particular emphasis is placed on Swiss and German laws. The comparison is functional rather than theoretical in its approach, in order to recommend specific solutions to problems that have arisen in practice. While corporate law disputes are considered arbitrable, disputes concerning the invalidity of corporate decisions and the actions for dissolution are heavily debated. The paper argues that both types of disputes are arbitrable, albeit judicial dissolution requests give rise to certain practical hurdles. It is also argued that arbitral awards should be granted the erga omnes effect, as long as the interested third parties are provided with the necessary procedural protection. Furthermore, arbitration clauses can be validly stipulated in AoA of privately held joint stock companies. However, the binding effect of the arbitration clause in question depends on its legal nature, namely, corporative or formal. Addressing this issue, the paper proposes to adopt a two-step test, and finally, it suggests practicable legislative recommendations and a model arbitration clause.
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Papers by Cem Veziroğlu
Publications by Cem Veziroğlu