Mandatory Mediation in Commercial Disputes in Turkey

As of 2019, under Article 5/A of the Turkish Commercial Code, applying to a mediator is a mandatory condition precedent for filing lawsuit in commercial cases involving monetary compensation or debt claims.

This means you cannot go directly to court for unpaid invoices, breach of contract damages, or other commercial debts. You must first try to resolve it via mediation. If you file a lawsuit without the “Final Disagreement Report” from a mediator, your case will be dismissed immediately on procedural grounds.

Which Cases Require Mandatory Mediation?

1. Commercial Receivables: Unpaid checks, bills, invoices between merchants.
2. Compensation Claims: Damages arising from commercial contracts.
3. Insurance Disputes: Claims against insurance companies (commercial nature).
4. Intellectual Property: Some commercial IP compensation claims.

The Mediation Process

1. Application: The creditor applies to the Mediation Bureau at the courthouse where the competent court is located (or usually where the debtor resides).
2. Appointment: A neutral mediator is appointed from the official roster.
3. Invitation: The mediator invites both parties to a first meeting.
4. Negotiation: Parties discuss the dispute. Attorneys can attend. Teleconference is possible.
5. Conclusion: The process typically lasts 6 weeks (extendable by 2 weeks).

Outcomes

• Agreement (Anlaşma): If parties agree, a document is signed. This document has the force of a court verdict (ilam). It can be enforced directly via Enforcement Offices without a trial.
• Disagreement (Anlaşamama): If no deal is reached, the mediator issues a “Final Disagreement Report”. The creditor attaches this report to their lawsuit petition and proceeds to court.

Fees

• If Agreed: The mediator’s fee stands as a percentage of the agreed amount (according to the official tariff), usually shared equally unless agreed otherwise.
• If Disagreed: The first 2 hours of mediation are paid by the Ministry of Justice (later collected from the losing party in court as litigation costs).

Why is it Important?

Mandatory mediation is not just a hurdle; it is an opportunity. Commercial litigation in Turkey can take 1-2 years. Mediation offers a chance to solve the issue in 1-2 months, saving time and legal costs. It is crucial to attend these meetings prepared, ideally with legal counsel, to negotiate effectively.

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