Exemption Of Legal Persons From Security For Costs Under The Hague Convention On Civil Procedure

Exemption Of Legal Persons From Security For Costs Under The Hague Convention On Civil Procedure

Article 17 of The Hague Convention of 1 March 1954 on Civil Procedure provides that no security, bond or deposit of any kind may be imposed by reason of their foreign nationality, or of lack of domicile or residence in the country, upon nationals of one of the Contracting States, having their domicile in one of these States, who are plaintiffs or parties intervening before the courts of another of those States. The Turkish Supreme Court ruled in two different decisions rendered in 2013 and in 2016 that the exemption from security for costs provided in article 17 of 1954Convention is only for physical persons and that legal persons are not under the scope of such exemption on the grounds that the personal scope of such exemption is specified by the term “national” in 1954 Convention and that, unlike 1954 Convention, legal persons are expressly included in scope of the exemption from security for costs under the article 14 of the Hague Convention of 25 October 1980 on International Access to Justice which is intended to substitute 1954 Convention.

However the terms “national” or “nationality” may be translated into Turkish as “teba” or “tabiiyet” which have broader meanings that include legal persons. Moreover it is observed that in many international conventions the terms “national/nationality” are used to indicate the belonging of legal persons or aircrafts or ships to a state. Therefore the use of the term “national” in art.17 of 1954 Convention does not constitute a ground for the interpretation that the exemption from security provided in article 17 of 1954 Convention is only for physical persons and that legal persons are not under the scope of such exemption.

Besides that neither provisions nor explanatory report of 1980 Convention are available for the interpretation that legal persons are not under the scope of the exemption provided in article 17 of 1954 Convention.

More importantly since access to justice is the main and fundamental rule and since security for costs is an exception as it’s a restriction thereof, any doubt or uncertainty about security for costs should be resolved in favor of the right to access to justice. However the Turkish Supreme Court ruled to the detriment thereof.

Finally decisions of member states’ courts consistently indicate that legal persons are under the scope of the exemption provided in article 17 of 1954 Convention. Contrarian decisions of the Turkish Supreme Court not only violates the 1954 Convention but also conflicts with the main objective of international conventions which aims that international conventions should be interpreted and practiced in the same way in all contracting states.

For more information see Prof. Dr. Emre Esen, “Hukuk Usulüne Dair La Haye Sözleşmesi Kapsamında Yabancı Tüzel Kişilerin Teminat Yükümlülüğünden Muafiyeti”, İnÜHFD, 2018/1, pp.1-26. https://dergipark.org.tr/tr/download/article-file/399791