Legal Article: Turkey – Compulsory mediation for resolving commercial disputes as of 1 January 2019
New articles have recently been added to the Turkish Commercial Code making it compulsory for parties to refer their commercial disputes to mediation before commencing proceedings in court.
Mr Sertac Sayhan of Sayhan Law Office, advises as below;
We would like to provide you with an update on recent developments and recent legislation which came into force on 01.01.2019 involving the handling of disputes through (mandatory) Alternative Dispute Resolution, namely mediation. New articles were added to the Turkish Commercial Code, where having made an attempt to settle the matter through mediation becomes one of the pre-conditions of being able to lodge a claim before the Courts of Turkey for commercial claims and claims which involve payment of a particular amount of money. This means - unless otherwise interpreted by the Courts etc.- that Cargo claims are to be taken firstly to a Mediator before being lodged at the Competent Court. This pre-condition was already in place for labour disputes since the beginning of 2018.
Please find below a very summary of the most crucial articles.
1- Essentially, any commercial claims to be lodged by Ourselves or against Ourselves after 01.01.2019 will have to be firstly dealt with through mediation. This applies to both new claims and claims for cancellation of objection to Bailiff’s Actions which may have been lodged prior to 01.01.2019.
2- In principle, in case the claim is filed to the Commercial Court instead of the Mediation, the Court will reject the application due ton on-fulfillment of the procedures as per the new changes at Law. However, this may varies from Court to Court and thus, It may not be certain in practice, whether a party who lodges its claim directly before the Court without making arrangements for mediation will have the claim rejected procedurally - on grounds of lack of compliance with duty - or whether the Judge will give the parties time to make a first attempt at settling the dispute through mediation.
3- Bailiff’s Actions are not directly affected by this change as parties will have the chance to directly lodge a Bailiff’s Action. However, as mentioned above, if the Debtor/Plaintiff objects against such debt, the claim to cancel such objection will have to be firstly brought before a Mediator. Therefore our suggestion for bringing a claim after 1 January 2019 will be to lodge a Bailiff’s Action in any case and then prepare to apply for mediation.
4- According to the new legislation, a Mediator registered to the region of the Court that has jurisdiction for the dispute shall have jurisdiction to settle the matter, and parties shall have the right to object to the jurisdiction of a Mediator chosen by the other party.
5- Another point to be considered, which already applies to labour disputes, is that in certain scenarios, such as when mediation cannot convene due to parties’ non-attendance or when parties cannot reach a settlement following a meeting lasting less than 2 hours, the Mediator’s fee shall be borne by the Ministry.
6- Another major point to bear in mind is that, should any of the parties fail to attend the first meeting without a valid reason, and thus the mediation fails, said party shall not be able to claim the Court fees from the opposing party even if their claim is fully/partially accepted. Therefore, attending the first mediation meeting is most important.
7- Application to the Mediator will stop the time bar running from the date of application until the decision is given.
8- In case there is any valid Arbitration clause which will be applicable to the dispute, the above referenced mediation procedure will not be applicable and the matter can be referred to the Arbitration as per the contract.
We hope the above is of assistance to clarify the present changes in the Law in Turkey and we remain at your disposal should any further clarification is needed in respect of further consequences and mediation procedures.
Sayhan Law Office
Buyukdere Cad. Pekin Apt.
No: 5/3 34384 Sisli - Istanbul
Mob: +90 532 283 96 97
Tel: +90 212 230 80 70
Fax: +90 212 230 80 71
Members are also directed to a set of helpful FAQs on this subject prepared by Ulgener Legal Consultants Law Office and attached above.
If Members have any additional questions on this subject, your usual contact at the Club would be pleased to assist.
Microsoft Word - COMPULSORY MEDIATION.docx (192 KB)
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