The Seller Competes Immediately After Selling a Turkish Business: Restrictive Covenant Claims

Quick summary

The issue and the legal distinction

A seller may launch a competing operation through a relative, approach transferred customers or hire a team. The facts must be tied to the covenant’s definitions of competing activity, affiliates and solicitation.

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A restriction on all economic activity anywhere in the world raises different issues from a limited promise protecting transferred goodwill. Competition-law analysis is essential and cannot be replaced by the parties’ consent.

What changes the assessment

Distinguish a customer’s independent choice from active solicitation. Preserve dated approaches, proposal comparisons and public business records through lawful means. Do not impersonate customers or access private communications.

The target company and buyer may have different rights. If urgent restraint is justified, the proposed order should match the protectable obligation and avoid an unnecessarily broad trading prohibition.

Legal framework

Provisions to examine: TCO Articles 26–27 and 112; applicable competition rules.

Start with the transaction documents and the identity of the promise-maker. A share purchase transfers shares; it does not automatically transfer the target company’s own claims to its new shareholder. A price-adjustment procedure, a warranty claim and a corporate claim may use different claimants and calculations.

Under TCO Article 19 the actual contractual arrangement needs examination; Article 112 provides the general breach framework where Turkish obligations law applies. Contractual notice mechanisms should be checked alongside mandatory limitation rules. An agreed accountant’s task also needs to be distinguished from the jurisdiction of a court or arbitral tribunal.

Evidence to preserve

1. Seller restrictive covenant and business definition.
2. Customer approach evidence.
3. New company public records.
4. Goodwill allocation and trading history.

Keep the original documents, identify their source and record when they were received. Preserve the version effective when the promise was made. Where a document is held by the opponent, request lawful preservation and consider the appropriate procedural route rather than trying to obtain it through unauthorised access.

A hypothetical example

Suppose a seller emails transferred customers offering the same products through a newly formed business. Preserve the approaches and compare them with a valid customer-solicitation restriction.

If a customer independently contacts the seller without any approach, a clause limited to solicitation may produce a different result. A broader competing-business restriction still needs its own validity assessment before a court is asked to enforce it.

This illustration explains the distinction; it is not a reported case or a prediction of an outcome.

Practical next steps

Obtain a validity assessment, identify specific prohibited acts and consider a proportionate notice or interim application supported by preserved evidence.

Build the first notice around the particular evidence: seller restrictive covenant and business definition, the relevant date, the alleged failure and the requested response. Keep proof of delivery. A preservation request, a demand for performance and a final election of remedies can have different consequences; choose them with the contract and deadlines in view.

Remedies and financial loss

Proven diverted margin, a valid agreed penalty and other remedies need separate analysis. Gross customer turnover is not automatically the buyer’s loss.

Procedure for a client outside Turkey

Nationality alone does not decide governing law or forum. Review the parties, place of performance, contractual choice, any arbitration provision and applicable mandatory rules. Consumer and employment matters can require protected-forum analysis. Turkish proceedings may also require a mediation step or security analysis depending on the dispute; neither should be assumed applicable to every case.

For a Turkish civil case, counsel can consider whether evidence preservation under HMK Articles 400 onward or interim relief under Articles 389 onward is justified. These are different measures with specific conditions, possible security and follow-up duties. A general fear of nonpayment does not establish entitlement to every injunction. Calculate the actual notice and filing calendar before waiting for a voluntary reply.

Primary legislation and official sources

• Turkish Code of Obligations No. 6098
• Code of Civil Procedure No. 6100
• International Private and Procedural Law No. 5718

Apply the wording and amendments effective for the relevant transaction and procedural step. A historical enactment text does not by itself establish the current rule.

Related English guides

• Shareholder and Company Disputes in Turkey for Overseas Owners
• Foreign Company Documents for Turkish Courts: Who Can Instruct the Lawyer?
• WhatsApp and Email Evidence in Turkish Civil Courts: Screenshots, Originals and Proof
• Mediation in Turkey When a Party Lives Abroad

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