Mediation in Commercial Disputes

In commercial disputes, mediation has been made mandatory as an alternative dispute resolution method, both to reduce the workload of the courts and to enable the parties to reach a fair outcome more quickly.

Mediation is mandatory in commercial disputes 

In commercial disputes, as of January 1, 2019, mediation has been made mandatory as a prerequisite for filing a lawsuit.

Accordingly, Article 5/A of the Commercial Code states that;

• While Article 4 of the Turkish Commercial Code and other laws stipulate that for commercial disputes concerning claims for payment of a sum of money and compensation, recourse to mediation before filing a lawsuit is a prerequisite for litigation;
• The mediator is required to finalize the application within 6 weeks of their appointment, and this period may be extended by the mediator for a maximum of 2 weeks in exceptional circumstances.

Selection of a mediator in commercial disputes

Under the conditions agreed upon by the parties or their representatives, an application is made to a mediator registered in the mediation registry. One of the parties or their representatives submits the application to the mediation office located within the jurisdiction of the competent court related to the dispute.

The importance of participation in the mediation process

Article 18/A of the Law on CivilProcedure, a party who fails to attend a meeting without a valid excuse is responsible for all court costs that will be awarded as a result of the lawsuit, should the dispute become a legal case. If neither party attends, the court costs in the subsequent legal proceedings are borne by the parties.

Circumstances under which mediation ends

The circumstances that terminate the mediation process in commercial disputes are listed in Article 17/1 of the Law on Mediation as follows:

• The parties reaching an agreement,
• If, after consulting with the parties, the mediator determines that further efforts at mediation are unnecessary,
• If one of the parties notifies the other party or the mediator that they are withdrawing from the mediation process,
• The parties mutually agree to end the mediation process
• It is the determination that the dispute is not suitable for mediation.

Time limit for filing a lawsuit after mediation

In cases of commercial disputes, if a settlement cannot be reached after mandatory mediation, the law stipulates a time limit for filing a lawsuit. Accordingly, a lawsuit must be filed with the labor court within two weeks from the date the final mediation report is issued.

The effect of the mediation process on statute of limitations

According to Article 16/2 of the HUAK (Law on Mediation in Turkey), the time elapsed from the commencement to the termination of the mediation process is not taken into account in the calculation of statutes of limitations and forfeiture periods.

To get expert answers to all the details and questions you may have, you can consult with Attorney Ferhat Kule