Disputes
Before suing over a commercial receivable: when is mediation mandatory?
For a company deciding to sue over a commercial receivable, the first stop is usually not the court but a mediator. Article 5/A of the Turkish Commercial Code makes mediation a precondition for commercial claims for the payment of a sum of money and for damages. Since 1 September 2023, actions for annulment of objection, negative declaratory actions and restitution claims have also been brought within its scope.
A lawsuit filed without mediation is dismissed on procedural grounds, which costs both time and money.
Timing
The mediator must conclude the process within six weeks of appointment, extendable by at most two weeks where necessary. From the application to the mediator until the final report, limitation periods are suspended and statutory time bars do not run.
This matters because, for claims subject to short and strict deadlines such as the action for annulment of objection, the time spent in mediation does not eat into the filing period. Even so, the file should clearly record when the period started and when it was suspended.
Failing to attend the first meeting
A party that fails to attend the first meeting without a valid excuse is held liable for all litigation costs in the later lawsuit, even if it wins, and no attorney fee is awarded in its favour. The other side’s absence can also be relied on later, so invitation and attendance records should be kept.
Preparation checklist
- Invoices, account statements and delivery documents
- The contract, purchase orders and correspondence
- Any formal notices and proof of service
- A separate calculation of principal, interest and other items
- The attendee’s authority to settle
If agreement is reached, the content of the settlement document matters as much as the agreement itself. The payment plan, acceleration of the remaining debt if an instalment is missed, interest and any security should be stated clearly, so that enforcement can be started without a new lawsuit if the debtor fails to pay.
Conclusion
For a creditor with its documents in order, commercial mediation can be a fast route to collection. For a creditor with scattered records, it becomes merely a stage that postpones the lawsuit by a few weeks.
Sources
This publication provides general information and does not replace legal advice on a specific matter.