Turkey – Compulsory mediation for resolving commercial disputes

Turkey has added new articles to its Commercial Code, effective January 1st 2019, that make it compulsory for parties to refer their commercial disputes to mediation before commencing proceedings in court.

Sertac Sayhan of Sayhan Law Office of Istanbul advised UK P&I Club members that, under the new articles in the Turkish Commercial Code, making an attempt to settle a matter through mediation was a pre-condition of being able to lodge a claim before the Courts of Turkey for commercial claims and claims which involve payment.

Sayhan said this meant that, unless otherwise interpreted by the Courts, cargo claims would have to be taken first to a mediator before being lodged at the Competent Court. The mediation pre-condition had been in place for labour disputes since the beginning of 2018.

Any commercial claims to be lodged after January 1st 2019 would have to be dealt with through mediation first, including claims for cancellation of objection to Bailiff’s Actions which may have been lodged prior to that date.

Sayhan wrote that, hypothetically, if the claim was filed to the Commercial Court instead of being taken to mediation first, in principle the Court would reject the application due. However, the lawyers observed that this might vary from Court to Court; it might not be certain in practice, whether a party who lodged a claim directly before the Court without making arrangements for mediation would have the claim rejected procedurally or whether the Judge would give the parties time to make a first attempt at settling the dispute through mediation.

Bailiff’s Actions were not directly affected by this change as parties would have the chance to directly lodge a Bailiff’s Action. If the Plaintiff objects to a debt, the claim to cancel such objection now has to be brought initially before a mediator. Sayhan advised that anyone bringing a claim after January 1st 2019 should lodge a Bailiff’s Action in any case and then prepare to apply for mediation.

Should any of the parties fail to attend the first mediation meeting without a valid reason that party would not be able to claim the Court fees from the opposing party even if the claim is fully/partially accepted. Therefore,  noted the lawyer, from a costs point of view attending the first mediation meeting was “most important”.

Application to the Mediator stops the time bar running from the date of application until the decision is given.