There is a new solution method for the commercial disputes in Turkish Justice System as of the beginning of 2019. The new regulation, which can be expressed “Compulsory Mediation for the Commercial Disputes” in short, is a useful progress in order to develop alternative solutions for disputes and secure the justice without any delay. For further information about the application of the rules and procedures of the regulation, you can consult with your advocate or legal advisor.
The subject I want to discuss here is a brief evaluation of the potential impacts of the application of the relevant compulsory mediation on the international commercial disputes.
Firstly I need to say that foreign tradesmen who resolve their disputes from the international relations through “Arbitration” which is put into a force for the arbitration agreements can continue to read the article out of interest. This is because the arbitration agreements are excluded from the compulsory mediation as cause of an action.
Let’s discuss the short history of the system before entering into the details;
The European Parliament adopted “The Directive on Certain Aspects of Mediation in Civil and Commercial Matters No 52” in 2008. This directive imposed an obligation to constitute a mediation institution for the justice systems of the members of the EU. Countries such as France, Germany, Netherlands, Poland and Portugal adapted the application for the mediation on a volunteer basis. However, first Italy then Greece and Turkey adopted the compulsory mediation as cause of an action.
In this regard, The Ministry of Justice of Republic of Turkey included primarily the disputes related to the Labour Law by modelling Italy in 2017, and then in 2019 the commercial disputes requiring a payment and the disputes with indemnity claims in the compulsory mediation system.
I want to draw your attention on the following issued related to the solutions of the international commercial disputes from the aspects of our foreign tradesmen.
1)ON THE ELIGIBILITY OF THE INTERMEDIATORS TO BE APPOINTED
Today, there are 9.490 mediators registered in the Ministry of Justice to be appointed for the commercial disputes across Turkey. The number of the mediators who are experienced and educated on the international commercial applications and the specific methods among the mentioned mediators is unknown. Are they informed about the terms of delivery, modes of payment, standards/certifications, rules and practises related to the breach of the contract of Incoterms? Can they apply the related rules correctly for the solutions of the disputes? Can they adopt the complex relations such as Global Supply Contracts, OEM or distributorship contracts in 6 weeks and manage them fairly, clearly and objectively? Can they understand the subject of the relevant dispute and prepare the necessary information/documentation? According to the unconfirmed news we heard, the Ministry of Justice is aware of the abovementioned problems and will start a special operation. I wish the compulsory mediation system will reach the level to satisfy the needs of our foreign tradesmen as soon as possible.
2)ON THE INVITATION TO THE MEDIATION PROCESS
According to the regulation, the dispute needs to be resolved in 6 weeks from the date the mediator start to work on it. The mediator needs to call the partied for a meeting in a specific period of time. The related period can be applicable for the local legal applications, however, I think it is not long enough to reach a foreign respondent for an international commercial dispute, to explain the relevant dispute to him/her, to invite them for the process or to enable an appointment for a representative in Turkey, to hold the first meeting, or to hold the second meeting if the first one is not enough. I recommend being careful on the judgement phase for the foreign party who does not duly called for the meeting in the mentioned period since it can cause a claim for a violation of the right to fair trial.
3)ON THE PARTICIPATION TO THE MEDIATION MEETINGS
Suppose that the parties are called for the mediation meeting, the foreign party declare that they will attend the process; however they cannot come to Turkey for the meetings and cannot also appoint a representative. In such a circumstance, there is no regulation in the current law which can enable the meetings to be held electronically (however, in the regulation of Greece, they have such a solution). In the application which we apply currently for the Labour Legislation, the invitations and meetings can be held electronically through the governed by the Ministry of Justice. However, I believe that more explicit regulations especially on the international commercial disputes will bring to more successful conclusions and will also eliminate the uncertainties related to the mediation process.
4)IN TERMS OF ENFORCEABILITY OF THE MEDIATION RECONCILIATION REPORT
The mediation reconciliation reports are not court orders or arbitral awards. If a judgement is a court order, a recognition and enforcement procedure can be carried out in the relevant foreign country in accordance with the Hague Convention with the date 1955. And if it is an arbitral award, it can be enforced by the courts of the foreign country in accordance with the New York Convention with the date 1958. Then, how the “mediation reconciliation reports” will be enforced?
Unfortunately, if the relevant foreign party does not have any assets in Turkey, the mediation reconciliation reports are not in force in the relevant foreign country. In other words, the mediation reconciliation reports cannot be submitted to the judicial bodies of the relevant foreign country and enforced. On the other hand, the last version of the “Singapore Mediation Convention” prepared by UNTICRAL was adopted on June 26th 2018 and submitted for signatures of the member countries. This means that we will have an international agreement on the enforcement of the mediation reconciliation reports within the next 5 years. However, it makes a new question to raise. Do the current legal regulations correspond with the mentioned version of the international convention? And in which level the enforcement competency of the mediation reconciliation reports within the exceptions of the Singapore Convention in the future?
Consequently, there are some major advantages of developing alternative solutions for the disputes in our country in terms of the integration to the international system. I believe this compulsory mediation solutions for disputes developed for the commercial disputes will make a great contribution to the change of our reconciliation logic and communication culture.
On the other hand, the arbitration is the most reliable body for the resolutions of the disputes related to the international commercial relations today and in the near future. Arbitration can be more applicable and reliable solution method with the help of correct agreement provisions, correct performance and right documentation.
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