Mediation vs. Arbitration: Differences, Advantages, and Scope...

Summary and Key Information

Mediation and Arbitration: Differences, Advantages, and Scope - Essential information you need to know: This guide comprehensively explains the legal processes, rights, and practical steps regarding the differences between mediation and arbitration in Turkey.

Introduction

Mediation and arbitration are alternative dispute resolution (ADR) methods outside of traditional court litigation. These methods aim to save time and costs for the parties involved.

The Law on Mediation No. 6325 and relevant legislation regulate these alternative solutions in Turkey, which are especially preferred in commercial disputes.

Benefits of Alternative Dispute Resolution

Mediation and arbitration provide faster and more economical solutions compared to judicial processes. Parties have more control over their own destiny.

Part One: Concepts of Mediation and Arbitration

1.1. What is Mediation?

Mediation is a method where parties find their own solutions with the help of a neutral third party:

• Neutral Facilitator: The mediator does not make a decision but guides the parties to an agreement and facilitates the process.
• Voluntary Participation: Parties can stop the process at any time (unless mandatory mediation applies as a condition precedent to litigation), and agreement is not compulsory. For detailed information, benefit from our expert legal consultancy.
• Confidentiality: The process is kept confidential, information is not leaked, and parties’ privacy is protected.
• Speed: It concludes much faster than court processes, saving time.

1.2. What is Arbitration?

Arbitration is a binding decision-making process by an arbitrator chosen by the parties:

• Binding Decision: The arbitrator’s decision is valid like a court judgment, binding on the parties, and enforceable.
• Selection of Arbitrator: Parties choose their own arbitrators, often experts in the field, ensuring trust.
• Flexible Process: Parties determine the rules of the process, unlike traditional litigation.
• Expertise: Expert arbitrators serve in technical matters, providing effective solutions for complex disputes.

1.3. Key Differences

• Decision-Making Authority: In mediation, the decision belongs to the parties; in arbitration, the arbitrator makes a binding decision.
• Outcome: Mediation ends with an agreement; arbitration ends with a mandatory award.
• Process Control: Parties control the process in mediation; the arbitrator manages it in arbitration.
• Appeal: Arbitration awards are subject to limited setting-aside actions, whereas mediation agreements are contracts.

Part Two: Scope of Application

2.1. Mediation Scope

• Family Disputes: Divorce consequences, custody, alimony.
• Consumer Disputes: Disputes between sellers and consumers.
• Employment Disputes: Employee-employer relations.
• Commercial Disputes: Commercial receivables and contracts.

2.2. Arbitration Scope

• Commercial Disputes: Breach of contract, debt-credit relations.
• Investment Disputes: International investments.
• Construction Disputes: Construction contracts, technical issues.

2.3. Mandatory Mediation in Turkey

In Turkey, mediation is a condition precedent to litigation (mandatory) for certain types of disputes:

• Employment Disputes: Re-employment, severance pay, overtime.
• Commercial Disputes: Certain commercial lawsuits involving monetary claims.
• Consumer Disputes: Disputes above a certain value or specific types.
• Tenancy Disputes: Recently added, covering rent determination and eviction.

Part Three: Process and Advantages

3.1. Mediation Process

1. Application: Application to a mediator or mediation bureau.
2. Negotiations: Parties express views, mediator facilitates.
3. Agreement: If agreed, a protocol is drafted.
4. Enforceability: The agreement can be annotated by a court to have the force of a court judgment.

3.2. Arbitration Process

1. Arbitration Agreement: Parties must have a valid arbitration clause or agreement.
2. Appointment of Arbitrators: Parties or institutions appoint arbitrators.
3. Proceedings: Evidence is presented, hearings held.
4. Award: The arbitrator renders a binding award.

Yaşkır Law Mediation and Arbitration Services

We stand by you with our expert team in mediation and arbitration processes. We provide professional support in process management, arbitrator selection, and agreement drafting. As Yaşkır Law Firm, we protect our clients’ rights most effectively with our expertise in alternative dispute resolution methods.

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