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NEGOTIABLE INSTRUMENTS LAW · COLLECTION AND DEFENSE

Endorsement, Aval, Signature and Bill of Exchange Disputes

Legitimate holder, aval, company authority to represent, denial of signature and alteration; bill of exchange and international liability.

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Determining the Type of Document and Its Status as a Negotiable Instrument

In a dispute over a negotiable security, the first step is to determine the legal nature of the document correctly. A check, a promissory note and a bill of exchange have different mandatory elements, parties and payment systems. The absence of one element can in some cases be cured by a supplementary provision of the law, while in others it may remove the document’s character as a negotiable instrument.

In the initial review, in particular:

  • The original of the document and its front and back
  • The mandatory entries specific to the type of document
  • The issue date and, if any, the maturity date
  • The place of issue, payment and presentment
  • The amount, the currency and the presentation in words and figures
  • The details of the issuer, drawee, payee and holder
  • The signature, stamp, representation and company authority
  • Endorsement and aval entries
  • Signs of erasure, scraping, addition and alteration
  • The bank and QR code details of the check
  • The relationship of the instrument with the underlying contract
  • The dates of presentment, protest, the “returned for lack of funds” notation and service

are assessed. Although a photocopy or a screenshot may help the preliminary review, examination of the original document may be necessary with regard to the physical characteristics of the instrument, the signatures and allegations of alteration.

Bill of Exchange Disputes

A bill of exchange is a negotiable instrument by which the drawer instructs the drawee to pay a certain amount to the payee or to the payee’s order. Different capacities may arise in a bill of exchange, such as drawer, drawee, acceptor, payee, endorser, person giving the aval and holder. Acceptance, maturity, presentment, protest and recourse procedures are important for preserving rights.

In bill of exchange disputes:

  • Mandatory elements and status as a negotiable instrument
  • Acceptance by the drawee and the scope of acceptance
  • Partial acceptance and refusal of acceptance
  • Presentment for payment and protest
  • The liability of the drawer, acceptor, endorser and person giving the aval
  • The endorsement chain and the legitimate holder
  • Recourse rights and time limits
  • Defenses arising from the underlying contract
  • Forged signature, unauthorized representation and alteration
  • Cancellation, recovery and payment ban for a bill of exchange
  • Bills of exchange issued or payable in a foreign country

are examined. Although the bill of exchange is used more narrowly in practice than the check and the promissory note, it can be of particular importance in international trade and financing relationships.

The Endorsement Chain and the Status of Legitimate Holder

Endorsement may provide for the transfer of the right arising from a negotiable instrument and, depending on the type of endorsement, other legal functions. An endorsement for collection, an endorsement for pledge, a full endorsement, a blank endorsement and an endorsement after maturity do not produce the same result. For the holder to be able to make a claim on the basis of the instrument, it is important that the endorsement chain follows one another in form and what the legal nature of possession is.

In the review:

  • The connection between the first payee and the later endorsers
  • The order of full and blank endorsements
  • Crossed, conditional or partial endorsement entries
  • The scope of an endorsement for collection and an endorsement for pledge
  • The effect of an endorsement after maturity or after protest
  • The distinction between the legitimate holder and the actual rightful holder
  • The authenticity of the endorsement signatures and the authority to represent
  • The recourse liability of the endorsers
  • Whether defenses can be raised against the holder
  • The position of the person holding a lost or stolen instrument

are assessed. That the endorsement chain looks formally in order does not by itself remove allegations of forged signature, bad faith, gross negligence or unauthorized acquisition.

Aval, Signature and Authority to Represent

An aval is an undertaking specific to negotiable instruments law that secures payment of the whole or part of the amount of a negotiable instrument. An aval and a general suretyship are not the same; form, liability and the defenses that can be raised are subject to different rules.

In this area:

  • The form of the aval entry and in whose favor it was given
  • The legal nature of a signature on the front or back of the instrument
  • The liability of the person giving the aval and the right of recourse
  • The limits of representation of a signature placed on behalf of a company
  • The conditions for a double signature or joint representation
  • Instruments issued by a representative whose authority has ended
  • Signatures placed on or outside the stamp
  • The personal liability of an unauthorized representative
  • Denial of signature and signature examination
  • The independent legal consequences of more than one signature

are addressed. The company’s trade registry records, the signature circular, the representation resolution, the date the instrument was issued and the manner in which the signature was placed must be examined together.

Forged Signatures, Unauthorized Signatures, Alteration and Stolen Instruments

Allegations that a signature is forged, that a signature placed on a blank sheet was used outside its purpose, that the instrument was later altered, or that the instrument was stolen may bring civil, enforcement and criminal processes into play together.

In these files:

  • Safekeeping of the original instrument in the court or enforcement file
  • The attribution of the signature and comparison documents
  • Technical examination of ink, print, handwriting and document integrity
  • Protrusions, erasures, scrapings and additions on the instrument
  • The manner in which the document was obtained and transferred
  • Endorsement signatures and authority to represent
  • Bank presentment and camera records
  • Cargo, delivery, e-mail and message records
  • Applications aimed at stopping the enforcement
  • Allegations of forgery, fraud, breach of trust or other offenses

are assessed. The opening of a criminal investigation may not by itself stop the enforcement; the time limits in the enforcement and civil courts must be preserved separately.

International Check, Promissory Note and Bill of Exchange Disputes

Where a negotiable instrument is issued in a foreign country, is payable in another country, one of the parties is a foreigner, or the instrument is given within an international trade relationship, a review of conflict of laws and applicability is required.

In this context:

  • The effect of the place of issue and the place of payment on the applicable law
  • Problems of capacity, form, signature and representation
  • Instruments issued in a foreign currency
  • Foreign bank checks and check-like payment instruments
  • Presentment, protest and notice procedures abroad
  • The signature of the authorized officer of a foreign company
  • The debtor and assets abroad
  • Recognition and enforcement of foreign court judgments
  • Enforcement or precautionary attachment in Türkiye
  • The effect of an arbitration clause on the underlying relationship and on the claim on the negotiable instrument
  • Service abroad, apostille and translation

are assessed. It must not be assumed that a document that is valid or enforceable in one country will produce the same results in another.

Not Every Signature Creates the Same Liability

The capacities of company representative, issuer, endorser and person giving the aval must be distinguished from one another. The position of the stamp and the signature may not by itself explain the whole file; the representation records on the issue date and all sides of the instrument are examined together.

If the signature is not yours

A denial of signature must be notified to the correct authority, within the period and clearly. Official or reliable signature documents with suitable dates are prepared for comparison. Filing a criminal complaint does not replace the period for applying to the enforcement court.

Place and law in an international instrument

The country of issue and of payment, the place of the signatures, and the conditions of capacity and representation may give rise to separate legal connections. Presentment or protest periods under Turkish law do not apply automatically to a foreign instrument. Enforcement in another country of a decision obtained in Türkiye is planned separately.

Legal Basis

Depending on the nature of the claim, the Turkish Commercial Code, the Enforcement and Bankruptcy Law and the relevant special provisions apply together.

This content is general information. It is not a substitute for a review of your specific file. Submitting an inquiry does not by itself create an attorney-client relationship and does not stop statutory time limits.