Mediation has become a central mechanism for resolving commercial disputes in Turkey. For businesses, it is not merely a procedural step before litigation. When properly prepared, mediation can provide a confidential and commercially focused process in which the parties retain control over the outcome.
It is particularly relevant to cross-border disputes involving a foreign company and a Turkish counterparty, including disputes over supply contracts, unpaid invoices, advances, distribution arrangements and other commercial agreements.
When is mediation mandatory in Turkish commercial disputes?
Article 5/A of the Turkish Commercial Code (TCC) makes an application to mediation a precondition to litigation for specified categories of commercial claims. The mandatory commercial mediation regime took effect on 1 January 2019 for relevant monetary receivables and compensation claims and was subsequently expressly extended to statutory categories including actions for cancellation of objection, negative declaratory actions and restitution claims.
Where a claim falls within the mandatory mediation regime, commencing court proceedings without first completing the required mediation stage may result in procedural dismissal for failure to satisfy a condition of action.
Does mandatory mediation mean that the parties must settle?
No. The obligation concerns participation in the legally required process, not an obligation to accept a settlement. A mediator is a neutral third party and does not decide which party is right. The parties retain authority over whether and on what terms the dispute is resolved.
What commercial disputes can be mediated?
- commercial debt recovery;
- non-payment for goods or services;
- recovery of advances and prepayments;
- damages claims;
- supply, distribution and agency disputes;
- disputes between Turkish and foreign companies;
- contract performance and termination disputes;
- other private-law commercial disputes that the parties are legally free to settle.
Mediation as part of litigation strategy
Treating mediation as a formality can reduce its value. Effective commercial mediation requires advance analysis of the evidence, the amount and legal basis of the claim, the opponent’s likely defences, settlement parameters, payment structures and the consequences of default.
Cross-border cases may also require consideration of governing law, authority of representatives, language, currency and payment issues, and the enforceability of the resulting arrangement.
Legal effect of a mediation settlement
A settlement document concluded through mediation can have significant legal consequences under Turkish law. Turkish legislation contains specific rules concerning the enforceability of mediation settlement documents, including special treatment for certain commercial settlements signed by the parties’ lawyers and the mediator.
The settlement should therefore clearly regulate the amount, payment dates, currency, default consequences, security where relevant and the scope of claims released or preserved.
Turkish court practice and the condition of mandatory mediation
Turkish courts examine whether mandatory mediation has been completed where the claim falls within the statutory regime. Correct classification of the relief sought is therefore important. Not every commercial dispute is automatically subject to mandatory mediation, although many disputes may still be suitable for voluntary mediation.
Commercial mediation for foreign companies in Turkey
For an international business, mediation may create room for solutions that a court judgment cannot easily provide. The parties may negotiate instalment schedules, restructuring of contractual obligations, return of goods, set-off, continuation of the commercial relationship or an orderly termination.
The legal team should approach mediation together with the potential litigation strategy. A credible court position can materially affect the quality of commercial negotiations.
RT-Union | Commercial Mediation and Dispute Resolution in Turkey
RT-Union’s commercial mediation practice includes Attorney Funda İnal Çukavın, a certified mediator registered with the Ministry of Justice of the Republic of Türkiye.
RT-Union has developed positive practical experience in resolving commercial disputes through mediation and negotiation, including disputes involving foreign companies.
Our work includes legal analysis of the dispute, preparation of the negotiation strategy, representation and support during mediation, drafting settlement terms and, where settlement is not achieved, subsequent litigation in Turkey.
Commercial mediation and litigation strategy are not mutually exclusive. A well-prepared court case can often provide the foundation for an effective negotiated settlement.
FAQ
Is mediation mandatory before filing a commercial lawsuit in Turkey? — For the categories of commercial claims specified by law, applying to a mediator is a condition before commencing litigation.
Must the parties reach a settlement? — No. The decision to settle and the terms of settlement remain with the parties.
Can a foreign company participate in mediation in Turkey? — Yes. Private-law disputes involving a foreign element can be suitable for mediation where the statutory conditions are met.
What happens if mediation fails? — Once the required process has been properly completed without settlement, the party may pursue its rights before the competent court.
