On 16/11/2022, Article 7 of Law No. 7421 added Provisional Article 19 to Expropriation Law No. 2942 to regulate proceedings concerning interference with property without expropriation. It permits instalment payment of compensation where the amount exceeds the specified budget, and set statutory interest for those instalments.
The Constitutional Court examined the application to annul Provisional Article 19 in judgment of 27/06/2024, Case No. 2024/4, Decision No. 2024/129, published in the Official Gazette on 09/12/2024.
The Court stressed that, although interference without expropriation is not a formal expropriation, the resulting interference with property rights is also subject to the safeguards in Articles 35 and 46 of the Constitution.
Article 46(4) of the Constitution provides for expropriation claims that “… the highest interest rate applicable to public receivables shall apply to instalments and expropriation compensation unpaid for any reason”. The Court held that this also applies to interference without expropriation and annulled the statutory-interest provision for instalments in Provisional Article 19.
What happened previously?
In its earlier judgment of 05/04/2023, Case No. 2022/83, Decision No. 2023/69, the Court annulled the following provision in Article 10(9) of the Expropriation Law: “If proceedings to determine expropriation compensation are not completed within four months, statutory interest accrues on the determined amount from the end of that period.” It reasoned that statutory interest could not offset loss of value during high inflation. The constitutional defects identified have still not been remedied legislatively, and settled case law following the annulment has yet to emerge.
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