High court rejects Goldaş bankruptcy in legal row

Hülya Güler ISTANBUL - Hürriyet

Société Générale had asked Goldaş to pay for 15 tons of gold it sold.

The High Court of Appeals has reversed a decision that sent Turkish jewelry firm Goldaş into bankruptcy as part of the firm’s five-year legal conflict with Société Générale over the fate of 15 tons of gold.

The verdict stated that if there is a debt claim related to an agreement between two sides, the claim must first be concluded in an authorized court in the United Kingdom before the matter can be subjected to a bankruptcy case in Turkey.

Société Générale applied to the Bakırköy Prosecutor’s office in March 2008, claiming that the bank gave approximately 15 tons of gold, worth $500 million, to Goldaş to be put on sale but never received subsequent word about the gold. The French bank accused Goldaş of major fraud in its petition and demanded the gold be returned. In June 2008, the court found Goldaş not guilty.

Société Générale then filed an appeal with the Istanbul Court of Serious Crimes. When its appeal was denied, the French bank went to the Justice Ministry, demanding that the court’s decision be annulled for the sake of the public. The ministry expedited the case to the Supreme Court of Appeals, which refused Société Générale’s request in February 2009.

The French bank sued to demand Goldaş be put into bankruptcy in 2009 over the claims that said the bank could not receive the payment for the 15 tons of gold. Goldaş requested that the matter be dismissed on the grounds that the agreement between both parties fell under the jurisdiction of the United Kingdom and demanded that British law be applied. However, the Istanbul Commercial Court of First Instance rejected Goldaş’s request and declared the Goldaş firm bankrupt at the end of the four-year trial process.

Goldaş submitted an appeal on the grounds that the local courts were not authorized in this case. The High Court of Appeals found the claims of Goldaş justified and decided to dismiss Société Générale’s original case.

The case, which has been going on for five years, will now return to the beginning. As the bankruptcy verdict for Goldaş is expected to be overturned, Société Générale is expected to appeal to the British courts within the scope of the agreement between the two sides.