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Newsletter on Mediation as Cause of Action in Commercial Lawsuits

Submitted by Firm:
Karadag Law Office
Article Type:
Legal Update
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The Law on the Initiating Execution Proceedings of Pecuniary Receivables Arising from Subscription Contracts (the “Law”) was published in the Official Gazette dated 19.12.2018. In this respect, mediation in certain commercial disputes has been accepted as a “statutory cause of action”.

In accordance with the Article 20 of the Law, Article 5/A entitled “Mediation as cause of action” has been added to the Turkish Commercial Code No. 6102 (“TCC”). Accordingly; commercial lawsuits mentioned in Article 4 of the TCC and in other laws, it is statutory to apply to the mediator before filing a lawsuit on claims for receivables and compensation related to payment of certain amount of money. If it is understood that the lawsuit was filed without applying to the mediator, the lawsuit shall be dismissed due to procedural ground.

Article 23 of the Law also added to the Law No. 6325 on Mediation in Civil Disputes under Article 18/A entitled “Mediation as cause of action” and thus the general framework of the mediation procedure in commercial cases has been set forth. According to this;

  • The application to mediation shall be made (i) to the mediation office where the competent court is located, in accordance with the subject matter of the dispute, and (ii) to the record office of the court assigned to the places in case there exists no mediation office.
     
  • As a rule, the mediator must conclude the application within 3 weeks from the date of appointment and in case of compulsory this period must be extended by the mediator for a maximum period of one week. However, the law extends the period for commercial disputes as 6 weeks. This period may also be extended by the mediator for a period of 2 weeks at maximum.
     
  • In case (i) the mediator cannot reach to parties, (ii) parties cannot negotiate due to absence of the parties, (iii) parties reach to an agreement; or (iv) the parties cannot reach to an agreement; the mediator shall terminate mediation procedure and issue the final report to notify the mediation office immediately.
     
  • The plaintiff must attach the original or a certified copy of the final report to the conclusion of the mediation procedure into his/her lawsuit petition. In case of non- compliance with this obligation, the plaintiff will be notified to submit the final report to the court within one week of statutory term. In the event of failure to comply, the case shall be dismissed due to procedural ground by the court.

In cases where an arbitration or other alternative dispute settlement obligation is required in special laws or where an arbitration agreement exists, the provisions on mediation shall not be applied as a cause of action.

The provisions of the Law on statutory mediation in commercial lawsuits shall enter into force on 01.01.2019. There will be no requirement for mediation proceedings in commercial cases related to payment of certain amount of money, which are/will be initiated prior to this date.

Please do not hesitate to contact, if you have any further query on the matter.