NEWSLETTER-2019-metin

210 NEWSLETTER 2019 Parallel Debt and its Legal Nature under Turkish Law* Att. Nezihe Boran Introduction Beyond any doubt, England is the trendsetter in the finance sector, ranging from Islamic finance to conventional finance. The mechanisms developed by England have been tested many times in various types of projects, deals and countries, serving to strengthen such mechanisms. As a result, the finance providers prefer English law, and most countries use English law documents as the basis to establish their own systems. In these circumstances, certain obstacles may arise in legal infrastructure and practice while implementing the mechanisms that belong to the Anglo Saxon legal system, such as England, to a civil law legal system, such as Turkey 1 . For instance, the notion of trust 2 under English law has not been recognised by civil law countries, such as Turkey. Alternative solutions have been adopted in this respect. In this newsletter article, among other alternatives, the parallel debt method, as well as its legal nature, will be set out, in a nutshell. Reason to Establish Parallel Debt A loan that is provided by more than one institution 3 is called a syndicated loan. Due to the fact that of finance providers’ reluctance to * Article of August 2019 1 Aksoy, Hüseyin Can : Securing Syndicated Loans with Accessory Collateral, Onikilevha, Istanbul, March, 2019, p. 3. 2 The details of the notion of Trust under English law: Ersanlı, Ekin ; ‘Approach to Trust Law from a Civil Law Perspective,’ Erdem & Erdem Newsletter, No- vember, 2017 (http://www.erdem-erdem.av.tr/publications/newsletter/approach- to-trust-law-from-a-civil-law-perspective/) (access date: August, 2019). 3 As per the scholars’ opinions, the consortium that is established by the syndicated lenders with an aim to provide financing is an ordinary partnership. For details: Aksoy , p. 26 ff.