Mandatory Mediation as a Condition of Litigation in Contentious Debt Action (Art. 308/b of the EBL)
Introduction
Article 285 et seq. of the Enforcement and Bankruptcy Law No. 2004 ("EBL") provides debtors who are unable or in danger of being unable to pay their debts when due, the opportunity to restructure their debts before bankruptcy and to eliminate the risk of bankruptcy. In 2018, with the comprehensive amendment to the Law, the concordat institution was made operational and the bankruptcy of debtors was prevented to a great extent in the financial bottleneck experienced by the country. As is known, during the preparation phase of the concordat project, the creditors who are called pursuant to Article 288 of the EBL notify their receivables, and pursuant to Article 300 of the EBL, the debtor makes a declaration regarding the notified receivables. In this context, the debtor may object to certain receivables and render these receivables contentious. Article 308/b of the EBL grants a right of action to the holders of the receivables that have become contentious and are therefore excluded from the concordat plan. Accordingly, the holders of the contentious receivables may file a lawsuit within one month from the date of the announcement of the concordat approval decision and request the elimination of the dispute.
Due to the nature of the lawsuit and the benefit to be obtained as a result of the lawsuit, it is a matter of debate whether this lawsuit to be filed is subject to mandatory mediation as a condition of litigation pursuant to Article 5/A of the Turkish Commercial Code No. 6102 ("TCC"). The law does not address this issue, and the Regional Courts of Appeal render diametrically opposed decisions. Although there are 2 published decisions of the Court of Cassation on this issue[1], it is too early to talk about a case law.
Nature of a Contested Claim
Whether the contentious receivable lawsuit is a determination or a performance lawsuit in terms of its legal nature has an important place in the answer to the question of whether the lawsuit, which is the subject of this article, is subject to mandatory mediation.
The nature of the lawsuit has been discussed from various angles among scholars. Scholars are mostly unanimous that the lawsuit is an action for performance related to the concordat, but is governed by the general provisions. Berkin, while presenting his opinion on the contentious debt action, likened this lawsuit to the cancellation of objection lawsuit and argued that the purpose of the plaintiff in filing the lawsuit is to eliminate the objection of the defendant party that makes the claim contentious.[2]According to Kuru, the contentious debt action is considered as a lawsuit for a receivable.[3]According to Atalı/Ermenek/Erdoğan, it is a performance lawsuit that aims to collect a certain amount of money according to the provisions of the concordat.[4]
It should not be forgotten that the receivable subject to this lawsuit is related with the concordat plan. For this reason, just as the creditor who has a judgment obtained as a result of a lawsuit and concluded before the approval of the concordat for a receivable subject to the concordat can only receive their receivables according to the terms of the concordat, here, the creditor will be able to collect their receivables based on the judgment they received as a result of the lawsuit filed after the approval, but subject to the concordat, within the terms of the concordat approval[5]
Since the contested debt action regulated under Article 308/b of the EBL shall be governed in accordance with the general provisions and shall result in the payment of a certain amount of money to the creditor in accordance with the concordat provisions, the question arises whether this lawsuit is subject to mandatory mediation, which is a condition of litigation introduced by Article 5/A of the TCC.
Judicial Decisions on the Subject
The issue of whether the action is subject to mandatory mediation as a condition of litigation has been addressed by many District Courts of Appeal in the country. The courts differ from each other in their opinions. While some of the District Courts of Appeal consider that the action should be subject to mandatory mediation since the creditor can demand the collection of some money with the judgment given at the end of the case, some of the District Courts of Appeal consider that the contentious debt action cannot be subject to mediation on the grounds that although the subject of the case is the collection of some money, the payment to be made is strictly connected with the concordat plan.
In order to evaluate these different opinions of the Regional Courts of Appeal, a decision of the 11th Civil Chamber of the Antalya Regional Court of Appeal and a decision of the 13th Civil Chamber of the Istanbul Regional Court of Appeal have been selected as examples.
In its decision[6] , the Istanbul Regional Court of Justice evaluated that the contested debt act under Article 308/b of the EBL is a commercial receivable lawsuit that should be seen in accordance with the general provisions and with the request to include the receivable, which has become contentious with the objection, in the concordat quorum. Accordingly, the Court considered that Article 5/A of the TCC also covers the lawsuit regulated under Article 308/b of the EBL and ruled that the lawsuit should be dismissed for lack of a cause of action.
Antalya Regional Court of Appeals[7] has made an assessment contrary to the opinion of the Istanbul Regional Court of Appeals. The Court stated that the lawsuit filed pursuant to Article 308/b of the EBL will determine the creditor's share in the concordat, and if the court decides to accept the dispute, which will be resolved according to the general provisions, the collection of the receivable according to the concordat conditions will result as long as the concordat is in force. Therefore, the Court considered that the disputed receivable lawsuit is not a lawsuit for a receivable or compensation, but a lawsuit for the determination of the disputed receivable and its inclusion in the concordat project. In addition, the Court of Appeal stated that if the mediation process is carried out prior to the lawsuit, it would create a contradiction for the debtor who objects to the receivable in the concordat process to accept this receivable in mediation. Based on these findings, the Court of Appeal decided that the contentious receivable lawsuit is not subject to mediation as a condition of litigation.
Upon these conflicting decisions of the regional courts of appeal, the issue was also examined by the Court of Cassation. In two decisions rendered by the 5th and 6th Civil Chambers of the Court of Cassation[8] , the Court of Cassation considers that mediation cannot be a condition of litigation in contentious receivables cases. The Court of Cassation emphasized that the scope of the agreement reached at the end of the mediation activity will be freely determined by the parties, the agreement document will be binding for the parties, but if the parties agree on different terms than the concordat approval project, the equality between the creditors will be disrupted and the acceptance of payment terms different from the concordat approval project will be contrary to the principle that the concordat is compulsory for all creditors.
Conclusion
The legal protection requested by the creditor from the court in the contentious debt action regulated under Article 308/b of the EBL is the recognition of the debt and payment of the debt according to the concordat provisions by eliminating the objection on the receivable that has become contentious with the objection of the debtor defendant. This lawsuit is likened to the annulment of the objection by some authors, while others consider it as a receivable lawsuit. However, in any case, there is a consensus among scholars that it is an action for performance to be tried according to the general provisions.
Since the lawsuit is a performance lawsuit and as a result, the plaintiff has the opportunity to obtain their receivables by paying a certain amount of money, it has been a matter of debate whether this lawsuit is within the scope of mandatory mediation, which is a condition of litigation. The regional courts of justice have given conflicting decisions on this issue. The Court of Cassation, on the other hand, in its 2 published decisions, decided that the contentious receivables case regulated under Article 308/b of the EBL is closely related to the concordat plan, the money to be paid to the plaintiff cannot be contrary to the concordat provisions, and therefore, it is not possible to freely negotiate the plaintiff's claim in the presence of the mediator, and therefore, the contentious receivables case is not within the scope of mandatory mediation.
- As of 01.03.2023, the date of the article, through the decisions accessible at www.kazanci.com.tr and www.lexpera.com.tr
- Berkin, Necmettin. Bankruptcy Law, Istanbul 1970, p.571- 572; Albayrak, Hakan / Bulut, Esra: "The Case on Contested Receivables in Concordat" Journal of Justice, 2022/1, S. 68, p. 465; Yazıcı, Çiğdem. "Adi Konkordatoda Aişmeli Alacak Hakkında Dava" Bankacılar Dergisi, S.116, p.11
- Kuru, Baki. Execution and Bankruptcy Law Handbook, 2nd Edition, Adalet Publishing House, 2013 Ankara, p.1700
- Atalı, Murat/Ermenek, İbrahim/Erdoğan, Ersin: Execution and Bankruptcy Law, 3rd Edition, Yetkin Publishing, Ankara 2020, p.697; Albayrak, Hakan / Bulut, Esra: "Çekişmeli A lacak Hakkında Dava" Adalet Dergisi, 2022/1, S. 68, p. 466; Yazıcı, Çiğdem. "Adi Konkordatoda Aişişmeli Alacak Hakkında Dava" Bankacılar Dergisi, S.116, p.11
- Albayrak, Hakan / Bulut, Esra: "Litigation on Contested Receivables in Concordat" Journal of Justice, 2022/1, S. 68, p. 467
- Istanbul Regional Court of Appeals 13th Civil Chamber, E.2020/1616 K.2020/1268, T.12.11.2020
- Antalya Regional Court of Justice 11th Civil Chamber, E.2021/1566 K.2021/1491, T.15.09.2021
- 5th Civil Chamber of the Court of Cassation, E.2022/7830 K.2022/14067, T.17.10.2022; 6th Civil Chamber of the Court of Cassation, E.2021/4402 K.2022/1359, T.14.03.2022
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