Banking andFinance Law

Scope

This area covers private law disputes between banks and other financial institutions and their customers arising from credit, deposit, card and payment transactions. Financial leasing, factoring and similar financing relationships are also considered under the same heading. A disagreement over a loan instalment, an account transaction or the scope of a security often stems from the parties interpreting the same records differently; the legal nature of the dispute, however, varies according to the capacity of the parties and the type of transaction.

Common issues

• Disputes over interest, fees and commissions arising from credit agreements
• Objections to credit card and debit card transactions
• Claims concerning unauthorised access to accounts and payment transactions
• Disputes arising from suretyship, mortgages and other forms of security
• Claims relating to letters of guarantee
• Receivables arising from financial leasing and factoring relationships
• Negotiations on the restructuring and rescheduling of debts

How does mediation work in this type of dispute?

In banking and finance disputes, the nature of mediation is determined by the capacity of the parties; for this reason, the area is treated as a “mixed” type.

• Actions arising from matters provided for in banking regulations are deemed commercial cases under Art. 4(1)(f) of the Turkish Commercial Code No. 6102, regardless of whether the customer is a merchant (consumer disputes excepted). Among these, for receivable and compensation claims whose subject matter is the payment of a sum of money, and for actions for annulment of objection, negative declaratory actions and actions for restitution, applying to a mediator before filing the action is a precondition for bringing the action under Art. 5/A of the same Code.
• Disputes between a bank and a customer who qualifies as a consumer are consumer disputes; in this area, mandatory pre-litigation mediation is regulated under Art. 73/A of Law No. 6502. The relationship between the route of application to the consumer arbitration committee and mediation is separately set out in the law.
• In disputes falling outside the scope of mandatory pre-litigation mediation, and where matters such as debt restructuring are discussed before an action is filed, mediation is voluntary; Law No. 6325 on Mediation in Civil Disputes provides the general framework.

Transactions carried out by an individual customer and by a commercial enterprise may not be subject to the same rules. The mediator is an independent and impartial third party; the mediator does not render a binding decision on the dispute and does not finalise an account by way of an expert examination. The sessions are confidential and the process rests on the will of the parties. If an agreement is reached, the settlement agreement drawn up becomes a document having the force of a court judgment under the conditions laid down in Law No. 6325.

Matters that may be discussed in the sessions

• Loan repayment and account records: which payment is allocated to which period, and which amount is disputed
• Account transactions and card movements
• The scope of suretyship and security; the position of the debtor, the surety and the person providing the security
• Payment schedule, maturity and restructuring terms

Accepting one amount does not mean that all remaining claims are accepted; it is important to set out separately the items agreed upon and those left open. No obligations are agreed on behalf of persons who do not take part in the sessions.

Process and points to note

The assessment requires the credit or account agreement, the payment plan, account statements, payment receipts, correspondence with the bank and any formal notices. In consumer transactions, the written application made to the bank and the response received are significant. If enforcement proceedings have been initiated, the period for objecting to the payment order is short and time limits must be monitored carefully.

In mandatory pre-litigation mediation, the application is made to the mediation office at the place where the competent court is located. The mediator concludes the process within three weeks of the date of appointment; in compelling circumstances, this period may be extended by a maximum of one week (Art. 18/A of Law No. 6325). If no agreement is reached, final minutes are drawn up and attached to the statement of claim. The running of limitation and preclusive periods, and the effect of the application to a mediator on those periods, are assessed according to the specific case.

When the agreement is drafted, the amounts, dates, method of payment and any conditions relating to security are clearly stated. Mediation does not make an agreement compulsory; failure to reach an agreement is one of the possible outcomes of the process.

Our office’s approach

In matters in this area, the office works on the review of agreements and documents, the determination of the legal nature of the dispute and the route of application, and the legal review of the settlement text. In disputes that cannot be resolved through mediation, representation in litigation and enforcement proceedings may arise. Where the role of mediator has been assumed in a dispute, the office does not act as counsel for any of the parties to that dispute.