Date: Sene 22, 2008 E.C.
Key Legal Interpretation:
When a legal entity (e.g., a bank) submits a petition to a court, it must be represented by a natural person granted full power of attorney in accordance with the law. A petition submitted by a branch manager without the power of attorney does not enable one to conclude that the legal entity has presented a complete argument and litigated. Therefore, following a litigation dismissed due to a petition not submitted by a proper representative, dismissing a new petition submitted by a legally represented person pursuant to Civ. Pro. C. Art. 5 (on the grounds of res judicata / previously decided) is a fundamental error of law.
It is clear that a person must have legal capacity to file a lawsuit, petition, or appeal application in court. As indicated by Article 33 of the Civil Procedure Code, a person must have legal capacity to appear in court as either a plaintiff or a defendant. Sub-article 1 of this provision stipulates that “any person having legal capacity may institute a suit.” It should be understood that this capacity is a state of competence that enables one to appear and claim rights by submitting a petition before a court or any other body authorized by relevant law to hear and decide cases. It is clear that the term “person” in this provision refers to a natural person or an entity endowed with legal personality. It is indisputable that an entity endowed with legal personality appears in court to sue or defend itself by being represented by a natural person. In this regard, a natural person must be given full power of attorney in accordance with the relevant law to represent the entity endowed with legal personality. This must also be in accordance with Article 63 of the Civil Procedure Code and the memorandum and articles of association of the entity endowed with legal personality. Accordingly, it can be seen that an entity endowed with legal personality must be represented by a natural person to submit a petition or litigate before a body with judicial power. It can be said that this entity endowed with legal personality has presented its case and litigated before a judicial body in accordance with the law only if it has litigated through a natural person granted full power of attorney. Article 5(1) of the Civil Procedure Code indicates that if an entity endowed with legal personality is represented in this manner, submits a petition or presents a full argument before a judicial body, and a decision is rendered by the judicial body, it is not possible to institute a second suit or any other type of litigation if it is identical in subject matter and the issue at hand to the previously decided litigation.
Reasoning of the Cassation Bench:
The Gondar branch manager of the applicant bank had requested the enforcement of their priority right as they held the house as collateral. However, since the special power of attorney of the president was not granted pursuant to the bank’s articles of association and Civ. Pro. C. Art. 63, it cannot be said that the bank was properly represented and presented a complete argument through the petition submitted by the branch manager. Therefore, the decision of the lower courts dismissing the petition subsequently submitted through an attorney, by stating that the applicant had previously submitted a petition and a decision was rendered (pursuant to Civ. Pro. C. Art. 5), constitutes a fundamental error of law. It is decided that the case be remanded to the High Court to investigate in accordance with the law whether the auction sale should be invalidated or not.