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It is no secret that Turkish courts are regularly burdened by heavy caseloads, which inevitably lead to delayed outcomes in the cases pending before them, breaching the parties’ right to justice without delay. According to the latest publicly available data provided by theMinistry of Justice Statistics, the averagenumber of cases pending before a judge in Turkey is 929.

There have been attempts in recent years to alleviate these backlogs by introducing alternative methods
to settle disputes.

In 2012, the Law on Mediation in Civil Disputes (“Mediation Law”) was introduced, implementing discretionary mediation procedures for the resolution of civil disputes. In late 2016, the scope of crimes subject to mandatory conciliation in criminal disputes was expanded to cover criminal threatening,theft, and fraud through an amendmentmade to the Criminal Procedure Code.

On January 1st, 2018, mandatory mediation wasintroduced to employment disputes which

turned out to be a great success in terms of reducing the workload of courts. As per the Ministry of Justice’s statistics, in the first four months following the introduction of the mandatory mediation requirementfor labor disputes, 65% of disputes were settled during mediation. Motivated by the success of this first move, effective as of 1 January 2019, mandatory mediation was extended to commercial disputes by inserting a provision in the Turkish Commercial Code (“TCC”).

arbitration in Turkey
Mediation for disputes in Turkey

Mandatory mediation is now considered a justiciability requirement, meaning the court is required to dismiss a case that
is subject to mandatory mediation on procedural grounds if mediation was not exhausted prior to initiation of the case. The mandatory mediation requirement covers future disputes and does not apply to cases that were pending before courtsof first instance or appellate level courts prior to 1 January 2019.

Commercial Disputes Subject to Mandatory Meditation

Article 5/A of the TCC sets forth themandatory mediation requirement in commercial disputes but does notspecifically list the types of cases it appliesto. Instead, the provision includes adefinition of the types of cases applicable. Accordingly, commercial cases as definedin the TCC or other laws in which the payment of a certain amount of money or compensation is sought are subject tomandatory mediation.

By defining thescope instead of explicitly listing the types of cases subject to mandatory mediation, to which we will refer to as the “scope problem”, the lawmaker has provided the judiciary great discretion to set precedent for this legal grey area.

"Some people use one half their ingenuity to get into debt, and the other half to avoid paying it.”
– George Prentice

During the first three months of 2019, the scope problem was the trendiest debate among practitioners and scholars. Many lawyers criticized the fact that the electronic court system automatically prevented them from filing cases thatshould not be subject to mandatory mediation without first submitting mediation minutes, thus preventing them from filing lawsuits.

Some scope-related aspects that havebeen clearly defined include:
  • Commercial disputes, the resolution of which is subject to arbitration or other alternative dispute methods, are not subject to mandatory mediation;
  • Court applications for protective measures, such as preliminary injunction or preliminary attachment, are not subject to mandatory mediation;however, before filing a case regarding the merits of the dispute, plaintiffs should apply for mediation; and
  • Statutes of limitations and otherstatutorily definite periods stop fromthe date of application to mediation until the signing of the final mediation minutes.

The applicable procedure for mandatory mediation is governed by Article 18/A of the Mediation Law.

Application: mediation is commenced byapplying to the mediation office located within the jurisdiction of the court that has jurisdiction over the dispute. A mediator from the registry of mediators is then assigned by the mediation office unless the parties agree on a specific mediatorlisted in the registry.

The mediator is not authorized to consider whether or not the mediation office from which he/she was assigned has jurisdiction over the dispute; however, the counter party is entitled to object to the mediation office’s jurisdiction by no later than the first mediation session. It is possible for the counter party to challenge the jurisdiction of the mediation office by submitting the relevant information and evidence it has regarding jurisdiction.

Under such scenario, the mediator would return themediation dossier to the mediation office,which would then send the dossier to the civil court of peace to render a finaldecision on jurisdiction within no more than one week.

Mediation sessions: it is possible for the parties to attend mediation sessions personally or through their representatives or legal counsel. Entities may be represented in mediation through their legal representatives or employees as well as their legal counsel.

Any party that does not participate in the mediation session without a valid excuse is required to pay all of the litigation expenses (mediator fees and litigation expenses made for the court’s adjudication if the parties fail to reach an agreement through mediation).

in mediation, the goal is to achieve a resolution that will satisfy both parties. Mediation adopts an interest-based approach focusing on the future. Conversely, the main goal of litigation is to ascertain justice. In doing so, a rights- based approach focused on the past is adopted.

How it works:

Mediation minutes: the mediator finalizes the mediation process by issuing final mediations minutes if (i) he/she could not reach the parties, (ii) he/she could notconduct mediation sessions due to failure of one or more party’s attendance, or (iii) the parties could not settle.

Settlement minutes: if the parties reach a settlement through mandatory mediation, the settlement minutes are drawn and
the decision is final. The applicant may no longer file a lawsuit in relation to its claimsthat were settled through mediation. Should the parties and their legal counsel execute the settlement minutes, the settlement minutes may be enforced

just like a court decision. Otherwise, anenforceability certificate must be obtained from the court in order to enforce the settlement minutes like a court decision.

Advantages of Mediation over Litigation

Mediators are required to finalize themediation process within six-weeks of their assignment. The six-week period may be extended by the mediator for no more than two weeks under exigent circumstances. Given the speed of the mediation process, it is conceivable that many parties may indeed choose to reach a settlement in mediation rather than get involved in a cumbersome, lengthy, and expensive litigation.

Confidentiality is another advantage ofmediation over litigation. Under Turkish law, hearings are open to the public and any member of the Turkish Bar Associationmay physically access court files unless a specific confidentiality order for thelawsuit has been rendered by the court, which in practice happens under very rare circumstances. In mediation, the parties, attendees of the mediation meeting sessions, and the mediator are required to keep all information and documents obtained during mediation, including thedetails of a settlement, confidential unlessagreed upon otherwise. The documents shared by the parties may not be used as evidence during litigation initiated after failure to reach a settlement inmediation.

Mediation allows parties to participate directly in the resolution of their disputesin an amicable and flexible environment where they can find creative solutions. Onthe other hand, in litigation, the resolver of the dispute is the judge and the expert witnesses and the environment are neither flexible nor amicable. Parties areonly involved in the resolution process indirectly since their role is limited to their attempt to convince the “resolvers” of their rightfulness.

In mediation, the goal is to achieve a resolution that will satisfy both parties. Mediation adopts an interest-based approach focusing on the future. Conversely, the main goal of litigation is to ascertain justice. In doing so, a rights- based approach focused on the past is adopted.

Turkey as Part of the Global Trend

Motivating parties statutorily to consider settling their disputes through alternative methods seems to be a global trend
for lawmakers. The requirement for a compulsory attempt to mediate orconciliate prior to filing a lawsuit beforethe court has been adopted by many jurisdictions around the world, including Delaware in the United States, Bayern and Baden Wurttemberg in Germany,Switzerland and Italy.

The primary goal of mandatory mediation is to eliminate the heavy caseload in courts and to provide parties with an interest-based opportunity for a speedy and amicable resolution oftheir disputes. In Turkey, parties are oftenforced to wait years to reach justice, and unfortunately the value of justice may be controversial after going through thecumbersome and lengthy procedures
to obtain a finalized court order. For this reason, it is no surprise that Turkey has joined the lawmakers’ global trend of statutorily motivating parties to consider settling their disputes through mediation, which is a good alternative for parties who wish to settle their commercial disputesin Turkey in a confidential and amicable environment without wasting time and effort.

Sources:

  1. 1  Justice Report for 2017 announced by the Ministry of Justice in May 2018, http://www.gazetevatan.com/2017-adalet-raporu-1169896-gundem/
  2. 2  Official Gazette: 28331 22 June 2012.
  3. 3  Mandatory conciliation of criminal disputes was already introduced in 2006 for certain crimes but was not fruitful at all.
  4. 4  Official Gazette: 25673 17 December 2014. Article 34 of Law No. 6763 Amending the Criminal Procedure Code and Other Statutes, published in the Official Gazette No. 30630 dated 19 December 2018.
  5. 5  Accessible at http://www.adb.adalet.gov.tr/Sayfalar/istatistikler/istatistikler/davasarti.pdf
  6. 6  Article 20 of Law No. 7155 Regarding the Procedures to Initiate Execution Proceedings for Receivables Arising out of Subscription Agreements published in the Official Gazette No. 29906 dated December2, 2016 .
  7. 7  Provisional Article 12 of the TCC.
  8. 8  Article 18/A(8) of the Mediation Law

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