Paid for Products but Not Getting a Refund? Your Rights in Distributor-Dealer Disputes

A frequent problem in commercial life: a business pays in advance for products it needs, but the seller cannot deliver them because of the distributor company's "dealer protection" policy — and does not refund the payment either. In this article, we examine how the amount paid can be recovered, the legal responsibilities in the seller-distributor relationship, and what the distributor's conduct restricting competition between dealers means from a competition law perspective.

Summary of the Situation

A business placed an order with a seller company for the renewal of its security system and paid the full amount in advance. However, the seller company was unable to deliver the products, citing the "dealer protection" policy of the distributor company from which it sources them (that is, because the purchase was made from a dealer offering a lower price). The seller company's representative acknowledged, in written communications (for example, messaging), that the distributor was not supplying the parts and that the payment would be refunded — but no actual refund took place. In this situation, the customer business must both recover the amount it paid and claim the loss caused by the delay.

The Legal Issue

Disputes of this kind involve two separate legal fronts:

1. The buyer-seller relationship: How is the refund of a paid-for but undelivered product claimed, and how can that claim's evidentiary basis be strengthened?
2. The seller-distributor relationship: Does the distributor's refusal to supply goods to other sellers in order to protect a particular dealer constitute a violation of competition law?

What Do the Court Decisions Say?

Payment Establishes a Contract

As stated in the decision of the Istanbul Regional Court of Appeal, 43rd Civil Chamber (E. 2021/1579, K. 2025/106, dated 2025), a payment made on the basis of a proforma invoice or offer form shows that a sales contract relationship has been formed between the parties. In that case, the seller bears the burden of proving that it delivered the goods; otherwise, it must refund the payment.

An Admission in Written Correspondence Is Strong Evidence

According to the decision of the Istanbul 8th Commercial Court of First Instance (E. 2024/49, K. 2024/751, dated 2024), the seller's acknowledgment (admission) through written communication (for example, via messaging applications) that it cannot deliver the products and will refund the payment constitutes conclusive evidence of the existence of the claim. Where such an admission exists, these written exchanges will be the strongest proof in an action for annulment of the debtor's objection to a possible enforcement proceeding.

Payment for Undelivered Goods Is Unjust Enrichment

Pursuant to the Istanbul Anadolu 1st Commercial Court of First Instance (E. 2023/973, K. 2025/370, dated 2025), payments made with the description "order payment" are left without legal basis as long as the product is not delivered. In that case, a refund may be claimed under the unjust enrichment provisions within the scope of Article 77/II of the Turkish Code of Obligations (TBK).

The Distributor's "Dealer Protection" Policy May Be a Competition Law Problem

A distributor's refusal to supply goods to one dealer in order to protect another can raise serious issues under the Law on the Protection of Competition No. 4054:

• In its decision (K. 22-51/754-313, dated 2022), the Competition Board emphasized that delaying or suspending deliveries because the buyer does not comply with prices is unlawful and warrants an administrative fine.
• According to the Competition Board's decision (K. 23-40/774-272, dated 2023), even where a selective distribution system is applied, dealers' freedom to sell to end users in any region they choose cannot be restricted.
• Under the Competition Board's established approach (K. 10-10/90-40, dated 2010), restricting the freedom of consumers or sellers to obtain products from whichever undertaking within the system they choose is a competition violation.

However, as emphasized in the same decisions, for private-law disputes such as payment refunds, the principally competent forum is the judicial courts (Commercial Courts); a complaint to the Competition Authority is a separate administrative route, independent of that process.

Points to Watch

• Archive all correspondence. Messaging records showing that the seller could not deliver and promised a refund, bank receipts and invoices are the most important evidence in the case.
• Do not neglect to send a formal notice. A formal notice (ihtarname) sent through a notary officially declares the rescission of the contract and opens the way to claims for default interest and the enforcement-denial compensation (icra inkar tazminatı).
• Do not confuse enforcement proceedings with a Competition Authority complaint. The enforcement proceeding and lawsuit for the refund must be pursued independently of the complaint about the distributor's competition violation.
• Factor in your delay loss as well. Especially if you were forced to turn to another supplier at a higher price for a critical need (such as a security system), this price difference can also be claimed as an item of compensation.

Conclusion: What Should You Do?

Your first step against a seller that will not refund your payment should be to send a formal notice through a notary declaring the rescission of the contract and demanding the refund within a reasonable period. If no payment is made by the end of that period, you can initiate enforcement proceedings without a judgment (ilamsız icra takibi), presenting your correspondence records as evidence; written exchanges in which the seller admits it could not deliver form a strong basis in a possible action for annulment of the objection. While the distributor's conduct restricting competition between dealers can additionally be made the subject of a complaint to the Competition Authority, the principal and primary route for recovering the payment and the delay loss is a debt claim to be filed before the commercial courts. Obtaining support from a commercial law attorney in disputes of this kind ensures the process is managed quickly and effectively.