Mediation in Shareholder and Partnership Disputes in Turkey

Introduction

Mediation in shareholder and partnership disputes in Turkey offers company owners, investors, directors and business partners an opportunity to resolve internal conflicts without immediately entering lengthy and potentially destructive court proceedings.

Disputes between shareholders rarely concern only a single unpaid amount. They often involve several connected issues, including management control, access to company records, dividend distribution, share transfers, company valuation, removal of directors, related-party transactions, misuse of company assets, deadlock and the departure of one or more shareholders.

These disputes may threaten not only the rights of the shareholders but also the continued operation of the company. Customers, employees, suppliers, lenders and investors may all be affected when the owners of a business become involved in an open legal conflict.

Mediation may provide an effective solution because it allows the parties to create commercial arrangements that a court may not be able to impose. Shareholders may agree on a structured buyout, a revised management model, independent financial supervision, payment of past dividends, amendment of voting procedures or an orderly separation of business interests.

The principal legislation governing mediation in Turkey is Law No. 6325 on Mediation in Civil Disputes. The law applies to private law disputes, including disputes containing a foreign element, where the parties may freely dispose of the subject matter. It recognises voluntary participation, equality, confidentiality and the parties’ authority to determine the scope of the settlement.

Shareholder and partnership disputes may be handled through either voluntary or mandatory mediation depending on the precise remedy requested. Where the intended commercial action concerns payment of money, compensation, annulment of an objection, negative declaratory relief or restitution, applying to mediation may constitute a condition of action before litigation under Article 5/A of the Turkish Commercial Code and the applicable mediation legislation.

However, not every company-law dispute becomes subject to mandatory mediation merely because it arises between shareholders. An action seeking annulment of a general assembly resolution, removal of a director, dissolution of a company or recognition of a corporate status may require a different procedural analysis.

This article explains mediation in shareholder and partnership disputes in Turkey, including its legal framework, common dispute types, mandatory and voluntary mediation, valuation, share transfers, management deadlock, dividend disputes, information rights, exit settlements, confidentiality, enforceability and the role of a Turkish corporate mediation lawyer.

What Is a Shareholder or Partnership Dispute?

A shareholder dispute is a conflict arising between persons who own shares or participation interests in the same company.

Depending on the company structure, the parties may be:

• Shareholders of a joint-stock company;
• Partners of a limited liability company;
• Partners of a general or limited partnership;
• Founders of a start-up;
• Members of a family-owned company;
• Majority and minority shareholders;
• Investors and founding shareholders;
• Former shareholders claiming payment or compensation.

The dispute may concern the relationship between shareholders themselves or between a shareholder and the company.

Typical shareholder and partnership disputes include:

• Failure to distribute dividends;
• Denial of access to company information;
• Disagreement over management decisions;
• Abuse of majority power;
• Minority shareholder oppression;
• Related-party transactions;
• Unauthorised use of company assets;
• Breach of a shareholders’ agreement;
• Breach of non-compete obligations;
• Disputed share transfers;
• Disagreement over company valuation;
• Capital increase disputes;
• Dilution of minority interests;
• Removal of a manager or director;
• Deadlock between equal shareholders;
• Exit or expulsion from the company;
• Dissolution of the company;
• Claims for compensation against directors;
• Failure to pay the value of transferred shares.

Many of these disputes combine monetary and non-monetary claims. The correct mediation and litigation strategy must therefore begin by identifying the exact remedy sought.

Why Are Shareholder Disputes Particularly Difficult?

Shareholder disputes differ from ordinary debt claims because the parties usually have an ongoing legal and commercial relationship.

The parties may jointly own:

• The same company;
• Intellectual property;
• Business premises;
• Customer relationships;
• Machinery;
• Brands;
• Licences;
• Bank accounts;
• Subsidiaries.

Even where shareholders no longer trust one another, they may remain legally connected until their shares are transferred or the company is dissolved.

Litigation may intensify the conflict because the proceedings can require allegations of misconduct, breach of loyalty, misuse of assets or manipulation of financial statements.

A court may resolve the legal issue presented, but it may not restructure the entire commercial relationship.

For example, a court may determine whether a general assembly resolution is valid. It may not necessarily create a new management structure, arrange a phased buyout, appoint an agreed independent accountant and regulate future access to financial records.

Mediation allows the parties to address these connected problems together.

Is Mediation Suitable for Shareholder Disputes?

Yes, many shareholder disputes are suitable for mediation because shareholders are generally free to settle their private financial and contractual rights.

Mediation may be used for disputes concerning:

• Share purchase prices;
• Shareholder loans;
• Dividend payments;
• Management fees;
• Exit compensation;
• Breach of shareholders’ agreements;
• Use of company property;
• Reimbursement of company expenses;
• Non-compete obligations;
• Confidentiality;
• Voting arrangements;
• Appointment of managers;
• Future governance;
• Sale of the company.

However, the parties cannot use mediation to disregard mandatory corporate law.

A mediation agreement cannot validly:

• Eliminate mandatory registration requirements;
• Authorise an unlawful dividend distribution;
• Transfer shares without satisfying mandatory form requirements;
• Circumvent creditor-protection rules;
• Validate a transaction prohibited by law;
• Remove statutory powers of company bodies contrary to mandatory legislation;
• Bind third parties who did not participate;
• Prevent public authorities from exercising legal powers.

The settlement must be translated into the required corporate resolutions, contracts, notarised documents and trade registry applications.

Mandatory or Voluntary Mediation?

A central issue is whether mediation is legally mandatory before the shareholder files a lawsuit.

Mandatory Mediation

Under the Turkish Commercial Code, mandatory mediation applies to specified commercial actions concerning monetary payment and compensation. Official Ministry of Justice guidance states that commercial claims seeking payment of a sum of money must generally be submitted to mediation before litigation where they fall within Article 5/A.

Following later amendments, the scope also includes covered commercial actions for annulment of objection, negative declaratory relief and restitution.

Accordingly, mandatory mediation may apply where a shareholder seeks:

• Payment of an agreed share purchase price;
• Payment of a shareholder loan;
• Compensation for breach of a shareholders’ agreement;
• Payment of a declared dividend;
• Reimbursement of company expenses;
• Compensation arising from misuse of company assets;
• Contractual penalties;
• Restitution of an amount allegedly paid without legal basis.

Voluntary Mediation

Voluntary mediation may be used even where no statutory condition of action applies.

Examples include disputes seeking:

• Management restructuring;
• Appointment or resignation of directors;
• Amendment of voting procedures;
• Voluntary sale of shares;
• Division of company operations;
• Information-access arrangements;
• Dissolution alternatives;
• Settlement of a general assembly conflict;
• Separation of family business interests.

Mixed Claims

A dispute may contain both monetary and non-monetary claims.

For example, a shareholder may seek:

• Annulment of a general assembly resolution;
• Payment of damages arising from the resolution;
• Access to company records.

The monetary claim may fall within mandatory mediation, while the corporate-status claim may not.

The lawyer should separate the claims carefully and determine whether one mediation application can validly cover the entire conflict.

Common Shareholder Disputes Suitable for Mediation

Management Deadlock

Management deadlock occurs where shareholders or directors cannot reach the decisions required for continued operation.

Deadlock is common in companies owned equally by two shareholders or two family branches.

It may concern:

• Appointment of managers;
• Bank-signature authority;
• Business strategy;
• Capital expenditure;
• Employment of family members;
• Distribution of profits;
• Sale of company assets;
• Taking new loans;
• Admission of investors.

Litigation may not provide a quick operational solution.

Mediation may create mechanisms such as:

• Rotating management;
• Independent director;
• Casting-vote procedure;
• Reserved matters list;
• Temporary budget;
• External accountant;
• Buy-sell mechanism;
• Separation of business divisions.

The agreement must be reflected in valid company resolutions and, where necessary, amendments to the articles of association.

Dividend and Profit Distribution Disputes

Shareholders may disagree about whether company profits should be distributed or retained.

Majority shareholders may prefer to retain profits in the company, while minority shareholders may depend on dividends as their return on investment.

A dividend dispute may involve:

• Accuracy of financial statements;
• Hidden distributions to controlling shareholders;
• Excessive management salaries;
• Related-party payments;
• Whether profits are legally distributable;
• Validity of the general assembly decision;
• Amount and timing of payment.

In a joint-stock company, profit distribution is generally within the authority of the general assembly, subject to statutory reserves, company articles, financial statements and mandatory law. The distribution decision is one of the general assembly’s core corporate functions.

Mediation may produce:

• Payment of previously declared dividends;
• Agreed future dividend policy;
• Independent audit;
• Limitation of related-party expenses;
• Partial distribution combined with reinvestment;
• Buyout of a shareholder seeking regular returns.

The parties cannot agree to distribute fictitious profits or violate capital-maintenance rules.

Information and Inspection Disputes

A shareholder may claim that management refuses to provide information about:

• Financial statements;
• Company contracts;
• Bank transactions;
• Related-party dealings;
• Director remuneration;
• Subsidiaries;
• Inventory;
• Tax liabilities.

In joint-stock companies, the Turkish Commercial Code gives shareholders rights to request information concerning company affairs and the conduct and results of the audit within the statutory framework. The right is balanced against company secrets and legitimate corporate interests.

Mediation may establish a practical information protocol covering:

• Documents to be produced;
• Review location;
• Confidentiality undertaking;
• Independent accountant access;
• Time periods;
• Redaction of third-party data;
• Regular financial reporting.

This may resolve the issue more efficiently than repeated court applications.

Share Transfer Disputes

Share transfer disputes are among the most common conflicts between business partners.

The parties may disagree about:

• Whether a transfer agreement was valid;
• Whether the purchase price was paid;
• Whether corporate approval was obtained;
• Whether pre-emption rights apply;
• Whether a transfer restriction was breached;
• Whether the seller remains a shareholder;
• Whether the buyer must be registered;
• Company valuation.

In limited liability companies, share transfers are subject to specific statutory requirements. The transfer agreement and the transaction creating the obligation to transfer must be in writing with signatures notarised. Unless the articles provide otherwise, general assembly approval is also required, and the transfer becomes effective through that approval.

A mediation agreement stating only that “the shareholder transfers all shares” may therefore be insufficient.

The settlement should regulate:

• Share percentage;
• Nominal value;
• Purchase price;
• Payment schedule;
• Corporate approval;
• Notarial execution;
• Trade registry steps;
• Tax and costs;
• Transfer date;
• Voting rights before completion;
• Existing shareholder loans;
• Guarantees given by the exiting shareholder;
• Release from management duties.

Valuation Disputes

The price of a shareholder’s interest is often the most difficult issue in a negotiated exit.

Different valuation methods may produce very different results.

Common methods include:

• Net asset value;
• Discounted cash flow;
• Earnings multiples;
• Revenue multiples;
• Market comparison;
• Liquidation value;
• Book value;
• Adjusted net asset value.

The parties may also disagree about:

• Hidden liabilities;
• Unrecorded assets;
• Intellectual property;
• Customer relationships;
• Shareholder loans;
• Tax risks;
• Related-party debts;
• Discounts for minority status;
• Control premiums;
• Lack of marketability.

Mediation may include a jointly appointed independent valuation expert.

The parties should define:

• Valuation date;
• Methodology;
• Documents to be reviewed;
• Treatment of debt and cash;
• Whether the result is binding;
• Procedure for challenging calculation errors;
• Expert cost allocation.

Breach of a Shareholders’ Agreement

Shareholders’ agreements frequently regulate matters beyond the company’s articles of association.

They may contain:

• Voting commitments;
• Board appointment rights;
• Pre-emption rights;
• Tag-along rights;
• Drag-along rights;
• Non-compete clauses;
• Confidentiality;
• Funding obligations;
• Exit mechanisms;
• Deadlock procedures;
• Dividend policies.

A breach may lead to claims for:

• Specific performance;
• Compensation;
• Contractual penalty;
• Share transfer;
• Injunction;
• Termination.

Mediation is particularly useful because the parties can renegotiate the agreement rather than merely determine whether a past breach occurred.

The settlement may:

• Amend voting arrangements;
• Extend funding deadlines;
• Replace one investor;
• Modify exit rights;
• Waive penalties conditionally;
• Create a new governance model.

Minority Shareholder Disputes

Minority shareholders may allege that controlling shareholders have:

• Excluded them from management;
• Denied information;
• Diverted company opportunities;
• Paid excessive remuneration;
• Conducted related-party transactions;
• Diluted their interests;
• Withheld dividends;
• Used company assets personally.

The majority may respond that its decisions were commercially necessary and validly approved.

Mediation may protect the minority shareholder without destabilising the company.

Potential solutions include:

• Independent board representation;
• Reserved-matter veto rights;
• Regular financial disclosure;
• External audit;
• Restriction on related-party transactions;
• Minimum dividend policy;
• Buyout at an agreed value;
• Tag-along protection.

Exit and Expulsion from a Limited Liability Company

A limited liability company partner may wish to leave because continuation of the relationship has become intolerable.

Under Article 638 of the Turkish Commercial Code, the articles may provide a right of withdrawal, and a partner may also seek withdrawal through court proceedings where justified grounds exist.

Related disputes may concern:

• Whether justified grounds exist;
• Amount of the exit payment;
• Valuation date;
• Company liquidity;
• Payment schedule;
• Release from guarantees;
• Management resignation;
• Non-compete obligations.

Mediation may allow the parties to avoid a contested withdrawal case by agreeing on a voluntary transfer or redemption structure.

The settlement must still comply with company-law rules concerning share transfer, capital protection, corporate approval and registration.

Dissolution Disputes

A shareholder may seek dissolution where the relationship has completely broken down.

Litigation over dissolution can endanger the company’s reputation, financing and commercial continuity.

Mediation may identify alternatives, including:

• Buyout of the claimant;
• Sale to a third-party investor;
• Division of business lines;
• Transfer of assets to separate companies;
• Change of management;
• Sale of the entire company;
• Winding-down timetable.

The parties should compare the value of a going concern with liquidation value before choosing dissolution.

Director and Manager Liability

Shareholders may allege that directors or managers caused damage through:

• Unauthorised payments;
• Negligent management;
• Conflict-of-interest transactions;
• Breach of loyalty;
• Misuse of confidential information;
• Failure to collect company receivables;
• Unlawful distributions.

These disputes may involve claims belonging to the company, individual shareholders or creditors depending on the legal basis.

Before settlement, the parties should determine:

• Who owns the claim;
• Which company body must approve settlement;
• Whether the director may vote;
• Whether an insurer is involved;
• Whether third-party creditor rights are affected;
• Whether the release can legally be given.

Mediation may include directors’ and officers’ liability insurers, auditors or parent companies where appropriate.

Choosing the Participants

The correct participants are essential in shareholder mediation.

Possible participants include:

• Shareholders;
• Company;
• Directors;
• Managers;
• Lawyers;
• Accountants;
• Tax advisers;
• Independent valuation experts;
• Insurers;
• Investors;
• Family representatives.

Not every interested person must attend every session.

However, the person signing must have sufficient authority.

For a company, the parties should verify:

• Trade registry records;
• Signature circular;
• Board or manager resolution;
• Conflict-of-interest restrictions;
• Settlement approval authority;
• Joint-signature rules.

A shareholder cannot automatically bind the company merely because the shareholder owns a majority interest.

Confidentiality in Shareholder Mediation

Confidentiality is one of the strongest advantages of mediation in internal company disputes.

The negotiations may involve:

• Financial difficulties;
• Customer lists;
• Tax risks;
• Trade secrets;
• Shareholder disagreements;
• Internal investigations;
• Management failures;
• Future investment plans;
• Sale negotiations.

Law No. 6325 provides a statutory confidentiality framework for mediators, parties and other participants unless otherwise agreed within legal limits. Information and documents prepared specifically for mediation also receive evidentiary protection under the law.

The parties may supplement the statutory rules with a detailed confidentiality protocol.

It may regulate:

• Access to financial documents;
• Use of virtual data rooms;
• Expert confidentiality;
• Disclosure to investors and lenders;
• Public statements;
• Return or destruction of records;
• Contractual penalties for breach.

Preparing for Shareholder Mediation

A shareholder should not attend without understanding the company’s legal and financial position.

Preparation may require review of:

• Articles of association;
• Shareholders’ agreement;
• Trade registry records;
• Share ledger;
• General assembly minutes;
• Board or manager resolutions;
• Financial statements;
• Tax records;
• Bank accounts;
• Related-party agreements;
• Shareholder loans;
• Guarantees;
• Intellectual property ownership;
• Employment contracts;
• Existing litigation.

The party should also identify:

• Main objective;
• Acceptable exit price;
• Management alternatives;
• Minimum information requirements;
• Litigation strategy;
• Risk of interim measures;
• Company solvency;
• Tax consequences.

The Role of an Independent Expert

Valuation and accounting disagreements may prevent settlement unless a neutral expert is involved.

The parties may jointly appoint:

• Certified public accountant;
• Independent auditor;
• Company valuation expert;
• Industry expert;
• Tax adviser;
• Corporate finance adviser.

The expert’s role should be defined in writing.

The parties should determine whether the expert will:

• Provide a non-binding opinion;
• Determine a binding value;
• Reconcile accounts;
• Identify disputed transactions;
• Calculate shareholder loans;
• Assess future earnings.

Mediation remains under the control of the parties even when technical expertise is used.

Settlement Structures

Shareholder mediation can produce many different settlement structures.

Share Buyout

One shareholder purchases the other’s shares.

Third-Party Sale

The parties jointly sell the business or one shareholder’s interest to an investor.

Company Redemption

Where legally permitted, the company acquires or redeems shares under a structure compliant with capital-protection rules.

Separation of Business Lines

Different shareholders take control of different divisions, assets or subsidiaries.

Revised Governance

The parties remain shareholders but modify management, voting and reporting arrangements.

Payment Settlement

The parties resolve dividends, loans, expenses or compensation without changing ownership.

Temporary Stabilisation

The parties agree on an interim management and budget structure while valuation or sale negotiations continue.

Drafting the Settlement Agreement

A shareholder mediation settlement should identify:

• Full identities of the parties;
• Company trade name;
• Company registration details;
• Shares and percentages;
• Dispute background;
• Claims settled;
• Payment obligations;
• Valuation method;
• Transfer procedure;
• Corporate approvals;
• Notarial requirements;
• Registration;
• Management resignations;
• Release from guarantees;
• Confidentiality;
• Tax;
• Default;
• Pending proceedings;
• Enforceability.

The agreement should separate:

1. Obligations between shareholders;
2. Obligations of the company;
3. Corporate decisions to be adopted;
4. Documents to be executed;
5. Registration steps.

Share Purchase Price and Payment Security

Where one shareholder exits, the agreement should state:

• Total price;
• Currency;
• Advance;
• Instalments;
• Due dates;
• Interest;
• Adjustment mechanism;
• Tax;
• Bank charges;
• Security;
• Default consequences.

Security may include:

• Bank guarantee;
• Pledge over shares;
• Mortgage;
• Escrow;
• Personal or corporate guarantee;
• Retention of transfer documents until payment.

An exiting shareholder should also seek release from personal guarantees given to banks, landlords, suppliers or public authorities.

A transfer of shares does not automatically release the former shareholder from third-party guarantees.

Non-Compete and Confidentiality Clauses

An exiting shareholder may agree not to compete with the company.

The clause should be reasonable and specific regarding:

• Duration;
• Territory;
• Business activities;
• Customers;
• Employees;
• Confidential information;
• Contractual penalty.

An excessively broad restriction may be challenged under mandatory law and proportionality principles.

Confidentiality should distinguish between:

• Trade secrets;
• General professional knowledge;
• Public information;
• Information required by law;
• Disclosure to advisers or authorities.

Corporate Resolutions and Registration

A mediation agreement does not replace every corporate action required under the Turkish Commercial Code.

Implementation may require:

• General assembly resolution;
• Board or manager resolution;
• Amendment of articles;
• Notarised share transfer agreement;
• Update of share ledger;
• Trade registry application;
• Beneficial ownership notification;
• New signature circular;
• Bank-authority update.

For limited liability company share transfers, written form with notarised signatures and, unless the articles provide otherwise, general assembly approval are central statutory requirements.

The settlement should contain a completion checklist and deadlines.

Enforceability of the Settlement

A shareholder mediation settlement is binding as a private law agreement if validly concluded.

The parties may also seek an enforceability annotation under Law No. 6325 where appropriate. Depending on the statutory signature structure, certain agreements may qualify as documents equivalent to a court judgment without a separate annotation.

However, direct enforceability requires obligations that are sufficiently clear.

A clause stating that a shareholder “will cooperate in the future” may not be suitable for compulsory enforcement.

A stronger obligation should identify:

• Exact document to be signed;
• Date;
• Payment amount;
• Corporate resolution;
• Share percentage;
• Registration action;
• Consequence of non-performance.

Mandatory corporate and notarial formalities remain applicable even if the mediation settlement is enforceable.

What Happens If No Agreement Is Reached?

If shareholder mediation fails, the appropriate next step depends on the claim.

Possible proceedings include:

• Commercial receivable action;
• Compensation claim;
• Annulment of general assembly resolution;
• Director liability action;
• Information and inspection proceedings;
• Withdrawal action;
• Dissolution action;
• Enforcement proceeding;
• Interim injunction;
• Interim attachment;
• Arbitration.

The final non-agreement report must be used where mediation was a condition of action.

The official Ministry of Justice confirms that mandatory commercial mediation applications are made through courthouse mediation offices and that the final report is required before the covered lawsuit proceeds.

Interim Measures During Mediation

Mediation does not automatically protect company assets or corporate rights.

Urgent court action may be needed where there is a risk of:

• Transfer of company assets;
• Destruction of records;
• Unlawful general assembly;
• Dilution through capital increase;
• Transfer of disputed shares;
• Withdrawal of company funds;
• Disclosure of trade secrets.

A shareholder may need to seek an interim injunction or evidence-preservation measure while mediation continues.

The use of mediation does not necessarily require the shareholder to abandon urgent protective remedies.

Foreign Shareholders

Foreign investors may participate in shareholder mediation in Turkey personally, online or through lawyers and authorised representatives.

The dispute may involve:

• Turkish subsidiary;
• Joint venture;
• Cross-border shareholders’ agreement;
• Foreign-currency investment;
• International financing;
• Arbitration clause;
• Foreign parent company.

Foreign parties should prepare:

• Corporate registration documents;
• Board resolutions;
• Powers of attorney;
• Apostille or legalisation;
• Sworn Turkish translations;
• Authority evidence.

The settlement should address:

• Governing law;
• Arbitration or court jurisdiction;
• Controlling language;
• Currency;
• Tax;
• International bank charges;
• Cross-border enforcement.

Family-Owned Companies

Family companies often combine business disagreements with personal and inheritance-related tensions.

Conflicts may concern:

• Employment of family members;
• Succession;
• Salary and dividends;
• Control by the founder;
• Unequal share transfers;
• Use of company property;
• Marriage or divorce effects;
• Heirs joining the company.

Mediation can address both legal and relational dimensions while preserving confidentiality.

Potential solutions include:

• Family constitution;
• Succession plan;
• Professional management;
• Share transfer timetable;
• Dividend policy;
• Restrictions on family employment;
• Separate ownership and management roles.

Common Mistakes in Shareholder Mediation

Treating the Dispute as Only a Monetary Claim

Management, control and access to information may be equally important.

Ignoring the Company as a Separate Legal Person

Shareholders cannot automatically dispose of rights belonging to the company.

Failing to Verify Authority

The settlement may require company-body approval.

Agreeing on Share Transfer Without Completing Formalities

Limited liability company transfers require statutory form and approval procedures.

Using an Unsupported Company Value

The parties may later challenge the price.

Failing to Address Shareholder Loans

Ownership transfer does not automatically settle separate debts.

Forgetting Personal Guarantees

The exiting shareholder may remain liable to banks or suppliers.

Giving a Release Before Payment

A conditional release may offer better protection.

Ignoring Tax Consequences

Share transfers, dividends and compensation may have different tax treatment.

Using Vague Governance Clauses

Future management obligations should be objective and measurable.

Practical Checklist

Before completing shareholder mediation, the parties should confirm:

• Correct company and shareholder identities;
• Current share ownership;
• Articles of association;
• Shareholders’ agreement;
• Authority documents;
• Claims and counterclaims;
• Company valuation;
• Shareholder loans;
• Guarantees;
• Existing litigation;
• Tax risks;
• Transfer restrictions;
• Required approvals;
• Payment security;
• Registration steps;
• Confidentiality;
• Default consequences;
• Enforceability.

The Role of a Turkish Corporate Mediation Lawyer

A Turkish corporate mediation lawyer may assist by:

• Determining whether mediation is mandatory;
• Analysing the company structure;
• Reviewing shareholders’ agreements;
• Verifying ownership and authority;
• Protecting minority rights;
• Coordinating valuation;
• Structuring a buyout;
• Drafting governance reforms;
• Preparing share transfer documents;
• Securing payment;
• Coordinating company resolutions;
• Completing trade registry procedures;
• Seeking interim measures;
• Filing litigation or arbitration if mediation fails.

The lawyer should combine corporate law, contract law, dispute resolution and commercial negotiation.

Frequently Asked Questions

Can shareholder disputes be mediated in Turkey?

Yes. Private law and commercial matters over which the parties may freely dispose can generally be mediated.

Is mediation mandatory for every shareholder dispute?

No. Mandatory mediation generally applies to covered commercial monetary and compensation claims. Corporate-status and governance actions require separate analysis.

Can shareholders agree on a share buyout through mediation?

Yes, but the transfer must comply with company-law, notarial, approval and registration requirements.

Can a limited company share be transferred only by signing the mediation agreement?

Not necessarily. Turkish Commercial Code Article 595 requires written form with notarised signatures and generally requires general assembly approval unless the articles provide otherwise.

Can mediation resolve a management deadlock?

Yes. The parties may agree on governance, voting, independent directors, buy-sell mechanisms or separation.

Can a minority shareholder request financial information during mediation?

Yes. The parties may establish a disclosure and inspection protocol, while statutory information rights remain relevant.

Can the mediator determine the company’s value?

The mediator does not ordinarily act as a valuation expert. The parties may jointly appoint an independent expert.

Is the settlement confidential?

Yes. Turkish mediation law establishes confidentiality obligations for the mediator and participants unless otherwise agreed within legal limits.

Can the settlement bind the company?

Only if the company is properly represented and the necessary corporate authority and approvals exist.

Can a shareholder be released from bank guarantees through the settlement?

The shareholders may agree to seek release, but the bank or third-party creditor must consent where its rights are affected.

What if mediation fails?

The party may proceed with the appropriate commercial action, corporate action, enforcement or arbitration after satisfying any mandatory mediation requirement.

Conclusion

Mediation in shareholder and partnership disputes in Turkey provides a flexible and confidential method for resolving conflicts that may otherwise threaten the survival and commercial value of a company.

Shareholder disputes may concern:

• Management;
• Dividends;
• Information rights;
• Share transfers;
• Company valuation;
• Minority protection;
• Director liability;
• Exit;
• Expulsion;
• Dissolution;
• Breach of shareholders’ agreements.

Some disputes are subject to mandatory mediation because they concern commercial monetary payment or compensation. Others may proceed through voluntary mediation because they concern governance, corporate status or non-monetary remedies.

Mediation is particularly effective where the parties need a solution broader than a court judgment.

The parties may agree on:

• Share purchase;
• Business sale;
• Management restructuring;
• Independent audit;
• Dividend policy;
• Buy-sell mechanism;
• Payment of shareholder loans;
• Separation of business divisions;
• Third-party investment;
• Orderly dissolution.

However, a mediation settlement does not override mandatory corporate law.

The parties must still comply with:

• Articles of association;
• Company-body approvals;
• Share transfer formalities;
• Notarial requirements;
• Trade registry procedures;
• Capital-protection rules;
• Tax obligations;
• Third-party creditor rights.

In limited liability companies, a mediated share-transfer agreement must be coordinated with the written and notarised form requirements and the general assembly approval regime under Article 595 of the Turkish Commercial Code.

A successful shareholder settlement should clearly regulate:

• Purchase price;
• Valuation;
• Payment schedule;
• Security;
• Shareholder loans;
• Guarantees;
• Management resignation;
• Confidentiality;
• Non-compete duties;
• Corporate approvals;
• Registration;
• Default;
• Pending proceedings.

A foreign shareholder should also consider powers of attorney, apostille, translations, governing law, arbitration and cross-border enforcement.

The settlement should distinguish between obligations of individual shareholders and obligations of the company. A shareholder cannot validly dispose of company rights or bind the company without proper authority.

A well-structured mediation may preserve the company, protect business value and allow the parties to separate without years of destructive litigation.

An experienced Turkish corporate mediation lawyer can analyse the corporate structure, determine whether mediation is mandatory, protect shareholder rights, coordinate valuation and convert the negotiated solution into valid company resolutions, transfer documents and an enforceable settlement.

Disclaimer: This article is provided for general informational purposes only and does not constitute legal, financial or tax advice. Turkish mediation, corporate, commercial, tax and procedural rules may change. Every shareholder or partnership dispute should be evaluated according to the company type, articles of association, shareholders’ agreement, claims, requested remedies and legislation in force on the relevant date.