Amendments to the Mediation Law under the 7th Judicial Package

Law No. 7445 on the Amendment of the Enforcement and Bankruptcy Law and Certain Laws (Law No. 7445), also known as the 7th Judicial Package, was published in the Official Gazette numbered 32154 on 05/04/2023. Law No. 7445 introduced certain amendments to Law No. 6325 on Mediation in Civil Disputes (Mediation Law).

The inclusion of disputes arising from rental relations within the scope of mandatory mediation, except for provisions regarding the evacuation of leased immovables through execution proceedings without judgment according to Law No. 2004 on Bankruptcy and Enforcement (Law No. 2004), is considered one of the remarkable modifications among the amendments made to the Mediation Law. It is observed that the disputes between lessors and lessees have increased recently due to the rapidly increasing rent prices in Turkey. Therefore, the lease disputes have become more challenging which cause losses of benefits for the parties due to the prolongation of the trial and other issues that may arise meanwhile. Pursuant to the amendments, it is deemed as necessary to apply to a mandatory mediation before filing a lawsuit in the disputes arising from a lease relationship as of 1 September 2023 which is the enforcement date for the aforementioned amendments. The amendments aim to reduce the workload of the courts and to prevent the potential loss of benefits of the parties due to prolonged litigation processes. In other words, as of 1 September 2023, no lawsuit arising from a lease dispute shall be filed unless mediation is applied. Therefore, a settlement will be signed in the event that the parties reach an agreement at the end of the mediation meetings. Moreover, parties will be entitled to obtain a certification on the enforceability of the settlement documents which have the power of a court decree from the authorized and competent court. However, the provisions regarding the evacuation of leased immovables through execution proceedings without judgement according to Law No. 2004 were exempted. Briefly, mediation is not a mandatory condition of litigation in the application of the provisions regarding eviction by execution without judgement.

Law No. 7445 introduced the following amendments along with the inclusion of the disputes arising from the lease relationship within the scope of mandatory mediation:

• The mediator shall inform the absent parties at the end of the mediation transaction by using all means of communication if the parties are not present. Previously, there was a legal gap regarding how to inform the parties who were not present at the mediation meeting about the fate of the meeting. The new provision regulates that the parties who are not present should be informed by the mediator using all kinds of communication tools.
• As the previous rule, in the absence of a particular arrangement, the certification of enforceability shall be requested from the civil court of peace where the mediator operates in the case the mediation is applied before the lawsuit is filed, or from the related court where the lawsuit is pending in the case of the mediation is applied during the pendency of the lawsuit. As per the amendments, as a particular provision, it is obligatory to obtain the certificate of enforceability from the commercial court of first instance for the execution of the international settlement agreement documents issued as a result of mediation.
• The disputes regarding the transfer of immovable property or the establishment of limited real rights on immovable property are "eligible" to be settled through mediation as of 1 September 2023. Accordingly, in the event of a dispute on the aforementioned issues, the parties may now voluntarily apply mediation for the resolution of the dispute.
• The provision stipulated in Article 18/4 of the Mediation Law as "The agreement document signed by the parties, their lawyers and the mediator together shall be deemed as a document in the nature of a court decree without seeking a certificate of enforceability." has been amended as "Except for the cases where a certificate of enforceability is required by law, the agreement document signed by the parties, their lawyers and the mediator together, and by the lawyers and the mediator together for commercial disputes, shall be deemed as a document in the nature of a court decree without seeking a certificate of enforceability." With this provision, the signatures of the parties are not required for the mediation minutes to be deemed as a document in the nature of a court decree in commercial disputes, and the signatures of the lawyer and the mediator are deemed sufficient. In cases where a certificate of enforceability is required by law, the obligation to obtain a certificate of enforceability has been reinforced in order for the mediation report to be considered as a court decree.
• Previously, it was deemed sufficient for the mediator to inform only the attorneys of the parties. However, with the amendments, it has been stipulated that the mediator must also inform the principal party, even if the relevant party is represented by an attorney as of 1 September 2023.
• After the application to the mediation, in the event that an enforcement proceeding is initiated against the applicant party regarding the subject of the dispute, it is regulated that the applicant party may file a negative declaration lawsuit against such enforcement proceeding within 2 weeks as of the date of the final report pursuant to Article 72 of the Law no. 2004, and if requested, an interim measure shall be applied against the collateral to be shown, which shall not be less than 15% of the receivable. This amendment will enter into force on 1 September 2023.
• In addition to the Mediation Law, the amendments regarding mediation are regulated under the Turkish Commercial Code. It has been stipulated that mediation is a mandatory litigation condition for cancellation of the objection, negative assessment and reclamation cases, the subject matter of which is a certain amount of money. This amendment will enter into force on 1 September 2023.
• In addition to the abovementioned regulations, mandatory mediation has been introduced for disputes regarding the division of movables and immovables and the elimination of partnerships, disputes arising from the Condominium Law No. 634 and neighbours’ rights as of 1 September 2023. In addition, regarding the enforceability of the settlement document issued in respect of these disputes; it is obligatory to obtain a certificate of enforceability for the settlement documents related to the immovable property from the court where the immovable property is located, and from the civil court of peace where the mediator operates for other settlement documents.

The mediation practice in the Turkish judicial system is becoming widespread and getting more important day by day considering the abovementioned and other regulations that have recently entered into force in Turkey. The mediation process, which has a major role in the rapid and profitable conclusion of disputes, can also be applied arbitrarily for many disputes, even if it is not mandatory -to the extent the subject matter allows-.

You can reach the full text of Law No. 7445 here (only available in Turkish).

Tagged with: Commercial Law, Mediation, 7445, Gokce, Aslihan Kayhan, Basak Tas