NEWSLETTER-2017

376 NEWSLETTER 2017 tionship grants the Security Agent an independent right to demand payment from the borrower or security provider. Any amounts due to the Security Agent under this parallel debt clause shall be decreased to the extent that the same corresponding amount has been received by the Secured Parties and vice versa . A security right is then created in favour of the Security Agent to secure the parallel debt, and any enforcement proceeds will be applied in repayment of the debt owed to the Secured Parties. Enforceability of Trust Law Provisions under Turkish Law Turkey is neither a party to the Hague Trust Convention, nor does it have any provisions regarding the interpretation of the institution of trust in foreign-law applications. Given that syndicated financing deals are mostly English-law governed, such common law facility documentation includes provisions that a Security Agent is appointed as a trustee for the beneficiaries, i.e. the lenders. Therefore, in those cases whereby there are onshore securities in Turkey to be established under Turkish law, such Turkish law documents generally refer to the Security Agent provisions in the facility documentation. At this point, the question as to whether trust law can be enforced under Turkish law arises. Even though there are no conclusive Turkish court provisions regarding the concept of trust, it is generally accepted that the Security Agent provisions are applicable under Turkish law. In Turkey, similar to other civil law jurisdictions, the concept of parallel debt is used in certain deals to ensure that accessory security would not fall away as a result of a transfer by novation and, thus, enable a changing class of beneficiaries to benefit from the security without the need for a separate transfer arrangement in Turkish deals. However, there is no direct equivalent of the institution of trust and, therefore, both academia and jurisprudence awaits commentary on the Turkish law approach to such institution, especially concerning English-law governed financing transactions.