Revolution in Electronic Promissory Notes – Court Recognizes Digital Notes

This past weekend, a precedent-setting ruling was issued in the case of Bizi Finance Ltd., in which the court was required to determine whether a promissory note signed electronically could be enforced through the enforcement and collection offices. In the digital era, where financial processes are increasingly moving online, the court ruled that a digital promissory note can be executed through enforcement proceedings, provided that it is a non-negotiable note or one that has not actually been traded.

The issue arose following the refusal of the enforcement office to accept a digital note for execution, arguing that it did not meet legal requirements. Bizi Finance Ltd., which provides credit to small and medium-sized businesses using electronic signatures, argued that there was no legal prohibition against it and that preventing the enforcement of electronic notes would significantly harm businesses operating under a digital model. The court accepted its position, ruling that an electronic signature meets the requirements of promissory note law and that there is no obligation for the note to be a physical document. Additionally, the court determined that the Electronic Signature Law, which allows the use of digital signatures in legal documents, takes precedence over an outdated interpretation of promissory note law and strengthens the legal recognition of electronic notes.

This decision marks an important step for the financial and legal sectors, as it aligns the law with modern business realities. Until now, credit and fintech companies have faced bureaucratic challenges when attempting to enforce digital notes and had to resort to alternative solutions, such as filing regular lawsuits instead of seeking direct enforcement. Now, with the recognition of electronic notes and reliance on the Electronic Signature Law, collection processes may become faster and more efficient for many businesses.

However, the court clarified that with regard to negotiable notes—those that can be transferred between different parties—the issue has not yet been settled and requires further legislation. This means that lawmakers are expected to address the matter soon to determine whether negotiable notes can also be electronic.

This ruling represents a significant step toward adapting regulations to the technological era, enabling businesses and financial companies to streamline their enforcement processes. We will continue to monitor developments on this issue and provide updates accordingly.