Turkey: Mandatory mediation on commercial disputes

Turkey

The Law on Initiating Proceedings Against Monetary Receivables Arising Out of Subscription Agreements (“Law no 7155”) was published in the Official Gazette on 19 December 2018. Although the purpose of the Law no 7155 is to set out as the integration of the aforementioned execution proceedings into National Judiciary Informatics System (UYAP), it bears further significance due to the introduction of amendments to the Turkish Commercial Code no 6102 (“TCC”), concerning the implementation of a mandatory mediation process.

The amendment is not completely unexpected since Turkey has taken steps continuously to support and encourage the alternative dispute resolution methods in the past years. In 2017, Law on Labor Courts no 7036 was adopted, making mediation mandatory in certain types of labor disputes in Turkey. This new approach to labor disputes had a very satisfactory outcome with a success rate of 70%, which has also relieved the courts up to an extent and supported a swift resolution of such disputes.

Pursuant to new provisions brought to the TCC by way of the Law no 7155, meditation now also becomes a mandatory process within the context of commercial cases and must be resorted to before initiating a lawsuit, provided that the claim in question is of a monetary nature. As per the amendment, the mediator shall finalize the mediation proceedings within six (6) weeks upon application by the relevant party, which might be extended to eight (8) weeks under special circumstances.

Monetary claims currently pending will not fall into the scope of the new requirement retrospectively and the relevant dispute resolution proceedings shall not be affected.

The relevant articles of the Law no 7155 (which introduces amendments to the TCC) will enter into effect as of 1 January 2019.

Contact:

Please do not hesitate to contact us at done.yalcin@ybb-av.com or burcu.boso@ybb-av.com for further details on the subject and/or with any specific questions.