- in Turkey
- within Antitrust/Competition Law, Litigation, Mediation & Arbitration and Employment and HR topic(s)
December 2025 – On 1 December 2025, the Turkish Constitutional Court published its decision dated 22 July 2025 ("Decision") in the Official Gazette annulling the statutory interest rate stipulated under Article 1 of the Law on Legal Interest and Default Interest ("Law No. 3095"). The Constitutional Court ruled that the statutory interest rate fails to protect creditors, violates the constitutional right to property, and must be annulled with respect to non-contractual obligations.
Below you can find our summary of the Decision.
Previous practice
Under Article 1 of Law No. 3095, if interest was payable under the Turkish Code of Obligations or the Turkish Commercial Code and the rate was not contractually agreed, the annual interest rate was set at 12%. The president has been authorised to adjust this rate monthly, reducing it by up to 10% or increasing it by up to twofold.
Pursuant to a presidential decision, statutory interest rate has been applied at a rate of 24% since 1 June 2024.
Constitutional Court's assessment
The application to the Constitutional Court argued that Article 1 of Law No. 3095 violates the constitutional right to property. The referring court emphasised that during periods of high inflation, the statutory interest rate remains significantly below inflation, causing substantial loss of value for creditors and failing to provide adequate protection.
The Constitutional Court examined the provision specifically in the context of non-contractual obligations (e.g., tort, unjust enrichment) and highlighted the following points:
- mechanisms for determining interest rates must compensate for the erosion in the value of money owed but not received on time;
- legal safeguards should exist to ensure that monetary claims retain their value against inflation;
- the current legal framework lacks an effective remedy to prevent the depreciation of claims due to inflation.
Conclusion
Türkiye's Constitutional Court ruled that the current provision is unconstitutional with respect to non-contractual obligations and annulled the said provision. The annulment will take effect nine months after 1 December 2025, allowing time for legislative amendments.
You can reach out the Decision from here (only available in Turkish).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
