Introduction
Over the past decade, Turkey has significantly expanded the role of alternative dispute resolution mechanisms in order to reduce court congestion and accelerate dispute resolution. One of the most important reforms in this regard is the introduction of mandatory mediation in certain types of disputes, particularly commercial and labor matters.
The mediation requirement in commercial disputes in Turkey has become a procedural precondition before filing a lawsuit. Failure to comply with this requirement leads to procedural dismissal of the case without examination of the merits.
For foreign investors and international companies doing business in Turkey, understanding the scope and operation of mandatory mediation is essential. Ignoring this procedural step can cause serious delays and strategic disadvantages.
This article explains the legal framework, scope, procedure, enforceability of settlement agreements, and practical implications of mediation in Turkish commercial disputes.
1. Legal Framework
The mediation requirement in commercial disputes in Turkey is regulated under:
- Turkish Commercial Code
- Law on Mediation in Civil Disputes (Law No. 6325)
- Turkish Code of Civil Procedure
Mandatory mediation for commercial disputes entered into force in 2019.
The purpose is:
- Reduce court workload
- Promote amicable settlement
- Accelerate dispute resolution
2. What Is Mandatory Mediation?
Mandatory mediation does not mean parties must reach an agreement.
It means:
- Parties must apply to mediation
- Participate in at least one session
- Obtain a final mediation report
Only after completion may they file a lawsuit.
This is called a procedural condition (dava şartı).
3. Scope of Mandatory Mediation in Commercial Disputes
The mediation requirement in commercial disputes in Turkey applies to:
- Monetary claims arising from commercial transactions
- Compensation claims
- Debt recovery claims
- Contractual damages
It generally applies when:
- The dispute involves payment of money
- The dispute qualifies as commercial under Turkish Commercial Code
Non-monetary claims may not require mandatory mediation.
4. Commercial Dispute Definition
A dispute is considered commercial if it arises from:
- Commercial contracts
- Trade activities
- Corporate matters
- Banking and finance
- Insurance
- Agency agreements
If both parties are merchants, most disputes are considered commercial.
Foreign companies operating in Turkey fall under this scope.
5. Application Procedure
To initiate mandatory mediation:
1️⃣ Applicant files request with Mediation Bureau at courthouse.
2️⃣ Mediator is appointed from official list.
3️⃣ Parties are contacted.
4️⃣ Mediation sessions are scheduled.
The entire process typically lasts:
- 3 to 6 weeks
This is significantly faster than court litigation.
6. Role of the Mediator
The mediator:
- Is neutral and independent
- Does not issue binding decision
- Facilitates negotiation
- Encourages settlement
Mediator cannot impose a solution.
Confidentiality is strictly protected.
7. Participation Requirement
Parties must:
- Attend at least one meeting
- Participate in good faith
Failure to attend without valid excuse may result in:
- Liability for litigation costs
- Procedural disadvantage
For foreign companies, attendance may be via attorney.
8. Outcome of Mediation
There are two possible outcomes:
A. Settlement Agreement
If parties reach agreement:
- Written settlement is signed
- It may be approved by court
- Becomes enforceable like court judgment
Settlement has binding legal effect.
B. No Agreement
Mediator issues final report.
This report is required to file lawsuit.
Without it, court dismisses case.
9. Enforceability of Settlement Agreement
If settlement is reached:
- Parties may apply to court for enforceability annotation.
- Once approved, it becomes directly enforceable.
No need for new lawsuit.
This gives mediation strong legal force.
10. Advantages of Mandatory Mediation
The mediation requirement in commercial disputes in Turkey provides:
- Speed
- Cost efficiency
- Confidentiality
- Business relationship preservation
- Reduced procedural risk
For commercial actors, maintaining relationships is often critical.
11. Costs of Mediation
Initial mediation fees are generally:
- Covered by the state for first two hours
- Shared by parties if extended
Compared to litigation:
- Significantly cheaper
- Lower procedural expenses
However, attorney fees remain separate.
12. Risks and Limitations
Despite advantages, risks include:
- Bad faith participation
- Delay tactics
- Confidentiality misuse
- Power imbalance
Mediation is ineffective if parties are unwilling to compromise.
13. Mediation and Foreign Investors
Foreign companies must consider:
- Language issues
- Cultural negotiation differences
- Representation by Turkish counsel
- Strategic use of mediation to test opponent’s position
Mandatory mediation may provide early insight into opponent’s legal arguments.
14. Comparison with Arbitration and Litigation
| Criteria | Mediation | Arbitration | Litigation |
|---|---|---|---|
| Binding Decision | No (unless settlement) | Yes | Yes |
| Speed | Very Fast | Fast | Slow |
| Confidential | Yes | Yes | No |
| Mandatory in Some Cases | Yes | No | Yes |
| Cost | Low | High | Moderate |
Mediation is often first procedural step before litigation.
15. Consequences of Non-Compliance
If a party files lawsuit without mediation:
- Court dismisses case procedurally.
- Claimant must restart process.
- Time and cost are lost.
This procedural mistake is common among foreign litigants unfamiliar with Turkish system.
16. Judicial Review of Mediation Process
Courts only examine:
- Whether mediation occurred
- Whether final report is submitted
Courts do not examine content of negotiations.
Confidentiality is strictly preserved.
17. Practical Strategic Recommendations
Before initiating mediation:
- Prepare legal position thoroughly
- Calculate settlement range
- Consider commercial implications
- Evaluate opponent’s financial situation
- Determine negotiation strategy
Mediation is not merely formality; it is strategic opportunity.
Conclusion
The mediation requirement in commercial disputes in Turkey represents a fundamental shift in Turkish dispute resolution culture. It introduces a mandatory pre-litigation stage aimed at promoting settlement, reducing judicial workload, and accelerating dispute resolution.
For foreign investors and commercial actors, understanding and strategically utilizing mediation is critical. Failure to comply results in procedural dismissal, while effective participation may resolve disputes quickly and cost-efficiently.
In modern Turkish commercial practice, mediation is no longer optional—it is an essential component of dispute management strategy.
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