In Article 1 and 2 of the Law on International Private and Procedural Law (IPPL) dated 27.11.2007 and numbered 5718, it is stated that Turkish courts cannot directly apply Turkish material law in disputes arising from transactions and relations related to private law with foreign elements and also it is stated that the material law to be applied will be determined by the method shown in this law. In any case, international conventions, of which the Republic of Turkey is a party, are reserved (IPPLArt. 1 /2) and conflict of laws rules regulated by special laws, besides regulated in IPPL, ‘to determine the material law which will be applied to the disputes arising from transactions and relations involving foreign elements’, will primarily find an application area.

In the case regarding the disputes arising from a promissory note including a foreign element, the Turkish judge shall first determine whether this bill carries the general characteristics of a bill of exchange, negotiable documents, and in particular a promissory note. In this case, the problem arises, according to which law the general characteristics of a bill of exchange, negotiable documents, and in particular a promissory note, will be determined. In private international law, this problem is called the qualification problem. In a case that has an element of foreignness, the Turkish judge, as a rule, makes the qualification according to the Turkish law, which is the law of the judge (lex fori). Then, in this case, the Turkish judge should first look at whether the promissory note which is the subject of the claim, carries the general characteristics of the negotiable instruments, bills of Exchange, and in particular a promissory note accepted in Turkish law. This examination should be made within the framework of the relevant provisions of the Turkish Commercial Code no. 6102 (TCC), which is entered into force on July 1, 2012.

If the judge believes that this document has the general characteristics of the bills of exchange according to Turkish law and therefore is a bill (promissory note), at a later stage, by making sub-qualifications about the disputes related to this promissory note, (1) the law to be applied to whether this promissory note is valid in terms of form or (2) in terms of legal capacity, (3) the law to be applied to the legal consequences of this promissory note and (4) the law to be applied to the payment for promissory note, (5) the law to be applied in case of unjust enrichment related to the nonpayment of promissory note and (6) the law to be applied in the annulment case to be filed in case of loss or theft of the bill and the law applicable to the measures to be taken in that case. As a rule, although the relevant provisions of the IPPL will be applied in transactions and relations related to private law with foreign elements, the conflict of laws rules that are used to determine the law to be applied in disputes regarding negotiable documents (check, policy, promissory note) with foreign elements are stipulated in TCC in the articles 766 to 775. The provisions between articles 766 and 775 regarding conflict of laws, with reference to article 778/1/j of the TCC, will also be applied to bonds. In cases where there are no provisions in the TCC, as it is a general law, IPPL will be applied together with the TCC.

The legal nature of a bill or bond, with a foreign element should be legally qualified as a promissory note according to Turkish material law as a lex fori. The law to be applied to the legal consequences of borrowing on the promissory note is subject to the law of the place of debt (place of signature) (TCC Art. 770 /2) for he borrowers, but for the drawer, the place of payment (TCC Art. 770/1). As an example of the issues within the scope of the law to be applied to the borrowing with bonds, the type and scope of the liability of the bond debtor, whether the defenses can be put forward, whether the persons who become indebted with the bond will not be able to include some records (such as the interest requirement) on the bond; in whiçh cases it can be requested to cancel the bond due to the lack in formal validity conditions or due to reasons such as such reasons, as well as all issues related to the liability of the bond debtor could be listed.

Matters such as what kind of transactions should be made in order to exercise the ‘right of application’, which refers to the right of demand against borrowers who have taken responsibility for the promissory note, and whether these transactions are mandatory, since there is no special provision in the TCC on policies and promissory notes, article 822/i provision of the TCC will be applied to the promissory note by analogy to the place of payment law.

The law to be applied to the form of the protest and the procedures required for the use and protection of the rights arising from a promissory note (such as the presentation of the bond for payment and notice) shall be determined according to the law of the country where the protest should be withdrawn or the transaction must be made (LRA-Locus Regit Actum rule) (TCC Art.768). 

The formal validity of borrowings made with promissory notes, is subject to the law of the country where the borrowings are signed (LRA-Locus Regit Actum) (TCC Art.767). The validity of borrowings made with promissory notes in terms of legal capacity is subject to the national law of the person entering into debt. However, if this law refers to the law of another country (reference - renvoi principle), that law is applied (TCC Art. 766 /1). In any case, even if he is not competent according to the relevant law, if he has signed the bond in a country whose law considers him competent, he becomes indebted properly (TCC Art. 766/2). As it is understood, the TCC adopts the theory of renvoi and the principle of transaction security only in terms of “capacity to act and/or have, use or abuse of rights.