INSIGHTS

Questions And Answers Concerning The Dimensions Wondered About Of The Mandatory Mediation In Commercial Disputes

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1- In which type of disputes is it required to apply to the commercial mediation?

Pursuant to the article 20 of the Law No. 7155 as well as the supplemental article 5/A of the Turkish Commercial Code No. 6012, out of the commercial lawsuits specified in the article 4 of the Turkish Commercial Code and other laws, those containing claims and indemnity claims concerning the payment of a definite amount of money must be referred to the mediation before filing a lawsuit, as a prerequisite of action.

2-What are the types of lawsuits requiring application to commercial mediation?

According to the article 4/1 of Turkish Commercial Law application must be made to mediation before filing a lawsuit regarding the claims and indemnity claims concerning the payment of a definite amount of money. An evaluation of the article 4 of the same law shows that it is possible to separate the commercial lawsuits into two categories, namely absolute commercial lawsuits and relative commercial lawsuits. According to that regulation, civil lawsuits arising from the issues concerning the commercial enterprise of both parties are relative commercial lawsuits. Furthermore, civil lawsuits arising from referral and bailment rights and intellectual and artistic proprietary rights that bear on a commercial enterprise are also relative commercial lawsuits. On the other hand, regardless of whether the parties are traders or not, civil lawsuits arising from the disputes regulated by the Turkish Commercial Code, Turkish Law of Obligations, Turkish Civil Law and listed in the first paragraph of the article 4 of Turkish Commercial Code and from issues regulated by some other special laws and legislation are absolute commercial lawsuits. 

3- How can an application be made for mediation as a prerequisite of action?

The application shall be made to the Mediation Office located at the place where the competent court is located depending on the subject of the lawsuit or, where there is no Mediatorship Office, to the section of registry commissioned to settle the dispute (Law on Mediation in Civil Disputes, article 18A/4). Application to the Mediation Office may be made by the parties, their legal representatives, or attorneys or apprentice to law authorized by the attorney and their secretaries. The applicant shall deliver to the Mediation Office all kinds of contact information belonging to itself or the counter party, if available. The office is also authorized to investigate the contact details of the parties kept in the official records.  

4-How shall the authorized mediation office to which an application shall be made be determined?

The provisions on authorization set forth in the article 5 and 18 of the Law No. 6800 shall apply regarding the determination of the authority of the authorized court depending on the subject of the dispute provided that the provisions on authorization set forth in the other laws are reserved. In this context the mediation office with general authorization is the mediation office located at the place where the court of the legal domicile of the plaintiff real or legal person is located on the date of the application.

Cases of special authority does not remove the general authority and the applicant has a right of choice in this regard. In cases where there is decisive authority only mediation office of the place where the court determined by the legislator is located shall be accepted as authorized mediation office. In cases where there is no decisive authority, traders or public legal persons may authorize one or more than one court by a contract regarding any disputes that has occurred or may occur between them. The application shall only be made to the mediation office of the place where these contractually determined courts are located.

5- What are the consequences of the failure to apply to the authorized mediation office?

The mediator does not, on its own, take into consideration whether the mediation office that has commissioned him as the mediator actually has authorization for that purpose, including e the cases where there is absolute authorization. The right and power to claim the non-competence of the mediation office belongs to the counter party. The counter party may raise an objection against the authority of the mediation office by submitting the documents on the authorization depending on the subject of the dispute at the first meeting at the latest. If the counter party fails to duly raise an objection against the authority of the mediation office by submitting the documents on authorization at the first meeting at the latest. The mediator shall not take into consideration the objection against the authorization and continues the mediation meetings.

In case of objection the mediator shall immediately deliver the file to the mediation office for being sent to the relevant civil court of peace. Based on the examination to be made on the file the court shall give a final decision on the authorized mediatorship office within one week at the latest and return the file to the mediation office (Law on Mediation in Civil Disputes article 18A/8, paragraph 1-4). During the examination on the objection against authorization the court shall taking into consideration not mediatorship office that has appointed the mediator, but the commission in whose list the assigned mediator is recorded (Regulation for Law on Mediation in Civil Disputes, article 25/4, paragraph 5).

The court decision shall be notified to the parties by the mediation office. The unauthorized mediation office shall also notify the decision to the mediator that it has appointed. The mediator finalizes the assignment over the mediator information office system. Mediator shall be entitled to compensation in exchange for the services that it has previously performed (Regulation for Law on Mediation in Civil Disputes, article 25/4, paragraph 7-9). In case of the rejection of the objection against authorization the same mediator shall be appointed again and his term of office shall begin on the date of the new appointment.

On the other hand, in case of the acceptance of the objection against authorization, the applicant may apply to the authorized Office within one week after the date of notification of the decision. In that case the application to the unauthorized mediation office shall be accepted as the date of the application to the authorized mediation office.

6- What happens if application is made to the mediatorship under the scope of labor disputes for commercial disputes?

This situation is important in respect of having made an application to mediation as a prerequisite of action. What is important in this context is the fact that the mediation process as a prerequisite of action has been completed. In that case the completion of the final minutes of the agreement is necessary and sufficient.

At this point hesitation may occur regarding the determination of the period of time during which lapse of time shall be suspended and period of prescription shall not run beginning from the date of application to the mediation office until the date on which the final minutes were issued (Law on Mediation in Civil Disputes article 18A/15); However, whether a dispute is an labor or commercial dispute is an issue requiring trial under the scope of the duty and therefore public order. For that reason, the date on which the final minutes shall be issued by the mediation shall be taken as a whole regardless of whether the parties have completed the mediation process as a prerequisite of action either within a total period of four weeks which is the general period of time and applies for industrial disputes or within a total period of eight weeks which applies for commercial disputes.

7- What is the period of time required for the completion of the mandatory mediation process in commercial disputes?

The mediator finalizes the application made within 6 weeks as of the date on which he was appointed as far as the mediation process as a prerequisite of action in commercial disputes is concerned. That period of time may be extended for maximum two weeks in compulsory cases (TCC, article 5A/2). At the end of that period of time the mediator shall issue his final minutes on its own motion confirming the failure to reach an agreement (Regulation for Law on Mediation in Civil Disputes, article 25/5).

However, if the mediation process was carried out through teleconference method and the parties had agreed on signing the minutes and agreement documents within the mediatorship process by sending them to each other either by post and/ or cargo. The mediation process shall be deemed to be completed after all signatures have been completed.

8- What happens in case of the failure of the mediator to complete the mediation process?

If it becomes difficult for the mediator to perform his duty due to legal or actual reasons during the process of mediation as a prerequisite of action (Regulation for Law on Mediation in Civil Disputes, article 20/5) the method of co-mediation shall be taken advantage of and the process shall be carried out and completed by the co-mediator.

9- What is the impact of mediation as a prerequisite of action on the periods of time specified?

Lapse of time shall be suspended and period of prescription shall not run during the period of time between the date of the application to the mediation office and the date of issuing the final minutes (Law on Mediation in Civil Disputes, article 18/A15).

On the other hand, if application is made to the mediator before filing a lawsuit in the voluntary mediation processes the lapse of time shall be suspended and the period of prescription shall not run beginning not from the date of application to the mediation office but the date on which the parties were invited to the first meeting and agreed with the mediator on the continuation of the process between them as documented by a minutes issued to that effect (Law on Mediation in Civil Disputes, article 16/1, paragraph 1).

10- What is the impact of mediation as a prerequisite of action on preliminary injunction and cautionary attachment?

Requests for preliminary injunction and cautionary attachment may be submitted either after or before filing a lawsuit. At this point it is possible, before submitting an application for mediatorship, to take a decision for preliminary injunction and cautionary attachment based on the amended transaction file, request the execution of that decision and then submit an application for mediation to fulfill the prerequisite of action.

11 What is the impact of mediation as a prerequisite of action on the mandatory arbitration?

The provisions on the mediation as a prerequisite of action shall not apply in cases where the special laws require application to arbitration or another alternative means of settlement of disputes or where there is an arbitration contract (Law on Mediation in Civil Disputes, article 18A/18).

12- Must one apply to mandatory mediation before filing a lawsuit for revoke the objection against the enforcement proceeding or the annulment of the objection?  

Application for mediation has not been regulated as a prerequisite of enforcement proceeding. However, the parties may apply to mediation voluntarily before initiating enforcement proceedings if they want. However, when an objection is raised against the payment order in case of an enforcement proceeding through general attachment, application for mediation is a prerequisite of action if the dispute is under the scope of mediation as a prerequisite of action before filing a lawsuit for the annulment of objection at the phase of the nullifying the objection (IIK article 67). However, the provisions on mediation as a prerequisite of action may not be applied before applying to the execution court for revoking the objection (IIK, article 68-70). Because the application for revoking the objection is not a lawsuit but a legal remedy specific to enforcement proceedings.

13- How must the minutes of mediation be prepared?

If the parties agree on some of the requests put forward during the process of mediation, the issues agreed on and especially the issues not agreed on shall be clearly specified in the minutes (Regulation for Law on Mediation in Civil Disputes, article 25/7). If a lawsuit has been filed in cases where the issues on which the parties could not reach an agreement could not be clearly understood in the final minutes, the judge or the court may rule for the dismissal of the lawsuit without prejudice due to the non-existence of the prerequisite of action without taking any further action on the grounds that a lawsuit was filed without applying to the mediator (Law on Mediation in Civil Disputes, article 18A/2).

14- Do the minutes of mediation bear legal consequences only for the applicant party?

During the process of mediation, it is not only possible to declare the requests of the applicant and include them in the negotiations but also the counter requests of the counter party. In that case, the issues agreed and not agreed on concerning the counter requests of the counter party must be stated in the final minutes to be issued and the agreement document, if issued. The final minutes of agreement or disagreement to be issued in this manner also provides mediation as a prerequisite of action also for the other party who had made no application.

15- What happens if one of the parties does not attend the first meeting without showing any valid excuse?

If the mediation activity ends due to the failure of one of the parties to attend the meeting without showing any valid excuse the non-attending party shall be stated in the final minutes and that party shall be held liable for the whole amount of litigation costs regardless of whether it was justified fully or partly at the end of the lawsuit. Furthermore, the court may not rule for the payment of attorney fee in favor of that party. With regard to the lawsuits to be filed after the mediation activities that ended due to the failure of the both parties to attend the first mediation meeting the litigation costs incurred by the parties shall be left on them (Law on Mediation in Civil Disputes article 18A/11). When this dispute is brought before the court, the court shall have sole and final jurisdiction regarding the validity of the above mentioned excuse. If the excuse which was deemed invalid by the mediator is deemed valid by the court the dispute may not be referred to the mediator again and must be finalized by the court.

16- What happens if the minutes of the non-agreement through mediation is not attached to the lawsuit petition?

In case of the failure to meet that requirement, the court shall send a notification to the plaintiff warning it that the final minutes must be submitted to the court within one week and that otherwise the lawsuit would be dismissed without prejudice. If the requirements of this written notice is not fulfilled, the court shall rule for the dismissal of the lawsuit without sending a notification of the lawsuit petition to the counter party (Law on Mediation in Civil Disputes article 18A/2, c. 1-3).

Furthermore, if it has been understood by the court that the lawsuit was filed without applying to the mediator the court shall rule for the dismissal of the lawsuit due to the non-existence of the prerequisite of action based on the lawsuit file without taking any further action (Law on Mediation in Civil Disputes, article 18A/2, c. 4; article 22.3 of Regulation for Law on Mediation in Civil Disputes). Here it is seen that the mediation process as a prerequisite of action has not been put forward as the lack of prerequisite of action that can be made good.

However, if the lack of prerequisite of action has not been noticed by the court before going into the merit of the lawsuit, nor it has been put forward by the parties and this deficiency was made good at the moment of the judgement, the lawsuit shall not be dismissed without prejudice due to the lack of the prerequisite of action at the beginning.

 

For further information and inquiries please contact:

Av. Yağmur EROGLU OYMAK ([email protected])

 

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 – ©Hansu Law Office

– Hansu Law Office is at your disposal to provide service to its local and foreign clients especially in the field of real estate, companies, tax and intellectual property rights. This bulletin aims at sharing the developments in the field of law. It should not be considered as a legal opinion or guidance. The opinion of the legal counselor should be taken regarding the private questions and problems.

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