Where reciprocal debt relationships exist between the creditor and the debtor during an execution proceeding under Turkish Law, the rules of set-off (takas) and offset (mahsup) come into play. Although often confused in practice, set-off and offset constitute separate legal mechanisms vital for procedural economy and preventing irreparable financial harm.

I. Legal Distinction Between Set-Off and Offset

As emphasized in settled precedents of the General Assembly of Civil Chambers of the Court of Cassation (Yargıtay), set-off and offset possess fundamentally distinct legal characteristics:

  • Offset (Mahsup): Refers to deducting expenses, yields, or partial payments from a single, unified debt relationship. It does not involve two independent claims.
  • Set-Off (Takas - TCO Art. 139 et seq.): Refers to the mutual extinguishing of two independent, reciprocal, due, and same-kind (monetary) obligations up to the amount of the smaller claim, exercised by a unilateral declaration.

II. Statutory Prerequisites for Raising Set-Off Claims in Execution Proceedings

To successfully raise a set-off claim against a creditor during execution proceedings, strict legal criteria must be met. Under established precedents of the Court of Cassation, the Enforcement Office or the Execution Law Court will only entertain a set-off claim if the counter-claim meets **at least one** of the following criteria:

  • 1) The set-off claim is rendered binding by a **court judgment (ilam)**,
  • 2) The set-off claim is subject to a separate execution proceeding that has become **finalized (kesinleşmiş takip)**,
  • 3) The set-off claim is evidenced by documents explicitly listed under Article 68 of the Enforcement and Bankruptcy Law (EBL) (i.e., notarized instruments or documents bearing an acknowledged signature).

III. Timing for Raising Set-Off Claims

Under Turkish enforcement practice, there is no strict statutory limitation period for asserting a set-off or offset claim. A debtor may raise a set-off claim at **any stage of the execution proceedings** prior to the complete collection of the debt and closure of the execution file.

IV. Competent Authority and Application Procedure

A set-off request may be submitted directly to the **Execution Office (İcra Dairesi)** or filed as a legal complaint/objection before the **Execution Law Court (İcra Hukuk Mahkemesi)**. In practice, Execution Offices frequently reject set-off requests due to their limited authority to verify the liquidity and authenticity of counter-claims.

Therefore, to prevent procedural delays and secure a stay of execution, it is legally recommended to file a direct application before the **Execution Law Court** having jurisdiction over the execution proceeding.

Disclaimer: The information provided above is for general guidance purposes only and does not constitute formal legal advice. Consulting a qualified attorney for specific legal disputes is strongly recommended.