A close look at the period of mandatory mediation for commercial disputes

Turkey

The Law on Procedures to Initiate Debt Collection Proceedings for Monetary Receivables Arising From Subscription Agreements (“Law No. 7155”) was published in the Official Gazette dated 19 December 2018 and numbered 30630. Although the main purpose of the Law No. 7155 is to set out new rules for the initiation of enforcement proceedings for monetary receivables arising out of consumer subscription agreements, it brought a significant change to the Turkish Commercial Code No. 6102 (“TCC”) by introducing a mediation application for commercial disputes and making this application mandatory for commercial disputes which are subject to payments of claims and damages before filing commercial lawsuits.

The main purpose of such introduction of a new mandatory institution is to reduce the significantly heavy workload of the commercial courts.

The mentioned change to the TCC became effective as of 1 January 2019. However, the provisions with regards to mandatory mediation are not to be applied to lawsuits already held at the first instance courts and regional civil courts and Supreme Courts as of its effective date.

Mediation process generally consists of the following steps:Mediation process

It is important to note that if the parties do not come to an agreement through the mediation, the claimants shall submit the minutes of the last mediation meeting to the related commercial court attached to their petitions at the time of initiation of a commercial lawsuit. In case the parties do not submit the mentioned meeting minutes to the related commercial court,  then one (1) week peremptory term would be granted by the court for submission of the mentioned meeting minutes, if it is not submitted within the granted time period, the commercial lawsuit shall be rejected based on procedural ground.

In addition to making an application to mediation as a pre-condition to filing a legal action for commercial disputes, the Law No. 7155 further regulates a certain period of time given to the appointed mediator for the resolution of commercial disputes. Pursuant to the Law No. 7155, the Mediator shall finalize the mediation proceedings within six (6) weeks starting from the appointment, which might have two (2) weeks extension only if requested by the Mediator under special circumstances.

However, what undetermined is that how long the appointment of the mediator would take upon the application to mediation is made by the parties. This was one of the reasons why concerns had arisen about how this mandatory mediation would affect the commercial lawsuit procedure and whether it would cause a delay in the commercial lawsuit procedure or lengthen the commercial lawsuit proceeding even which may increase the risk of non-recoverable debts.

The so far elapsed six (6) months following the enactment of the mandatory mediation showed us that in practice, once the parties apply to mediation before initiating a commercial lawsuit, an electronic system which is being used by the mediators and also linked to the National Judiciary Informatics System (“UYAP”) automatically appoints a mediator (whom is registered with the mediators’ registry) on the date of the lawsuit is filed; where, the appointed mediator also receives an SMS message simultaneously.

If the first appointed mediator does not approve the duty of acceptance through the Mediator portal in the electronic system within one (1) day upon his/her appointment, then the authorized institution moves to assigning another (second) mediator. Hence, it could be concluded that there shall not be a significant delay in relation to the finalization of the lawsuits due to the application of the mandatory mediation proceedings.     

In relation to such mandatory mediation, another concern of the practitioners has arisen that whether or not there are enough mediators to meet the number of upcoming commercial lawsuits that is increasing day by day. Particularly, even it is assumed that there are enough mediators, whether their expertise areas are in compliance with commercial disputes is a further question. So far, no distinction as to the expertise areas of the mediators under the mediators’ registry had been made.

On the other hand, it should be noted all the applicants who intent to get registered with the mediators’ registry shall be graduates of a law school and have a professional experience of at least five (5) years. Further, such applicants shall complete the eighty-four (84) hours of general “mediation training” and pass the written exam, which is made by the Ministry of Justice.

However, we believe that such conclusion in relation to the concerns as to the sufficiency of the number and expertise of the mediators could be made after experiencing/conducting such mandatory mediation proceedings for at least one (1) more year.  

Contact

Please do not hesitate to contact us at done.yalcin@ybbk-av.com or arcan.kemahli@ybbk-av.com for further details on the subject or with any specific questions.