Conciliation Pursuant to Article 35/A of the Attorney’s Act 25 November 2019

It is a known fact that many companies have difficulty in payment due to the economic problems experienced in our country in recent period and that the product and service supplier companies have problems collecting debts.

At this point, one of the safest ways for the debtors who are willing to pay their debts but need a different payment schedule and for the creditors who do not want to pursue a long and costly litigation processes in order to collect their debts is reconciliation pursuant to Article 35/A of the Law “Attorneys’s Act” numbered 1136.

The reconciliation process is carried out with the participation of the attorneys of the parties and it is a highly preferable way both because the signed agreement can be enforced as a court order in accordance with the Enforcement and Bankruptcy Law and it saves the parties from the costs of standard mediation and litigation processes.

What is the 35/A Conciliation?

Article 35/A of the Law Numbered 1136 is as follows:

In actions and cases that have been entrusted to them, attorneys, together with their clients, may invite the other party to conciliation before a suit has been filed or before hearings have commenced for an already filed suit, provided that such conciliation pertains exclusively to matters that the parties may elicit of their own will.

If the other party takes up the invitation and conciliation are reached, the subject of the conciliation, its place and date, and the actions that each party will carry out are laid out in a memorandum and signed jointly by the attorneys and the clients.

Such memoranda are in the nature of a court decision in the sense of Article 38 of the Enforcement and Bankruptcy Law, number 2004, dated 9 June 1932.

As understood from the article; the main element of the 35/A conciliation is the attorneys of the parties, and it is not possible for a conciliation process that does not involve attorneys to have the protections under Article 35/A.

Therefore; it will not be possible to speak of a 35 / A conciliation unless the agreement is signed by both parties' attorneys.

What İs the Advantage of 35 / a Conciliation Compared to Other Settlement Types?

Memorandum signed jointly by the attorneys and the clients in agreement on the settlement of the dispute is in the nature of a court decision in the sense of Article 38 of the Enforcement and Bankruptcy Law, number 2004.

That is, if one of the parties does not comply with the conditions of the said agreement; the other party, instead of pursuing a costly litigation process that will continue for years, will be able to directly enforce the conciliation report as if it were a court decision and collect the claims.

Furthermore, if the settlement is made before the suit has been filed the only cost to be incurred by the parties in such settlement shall be the service fee to be paid to the attorneys, which saves the parties from additional litigation and mediation costs.

What Are the Aspects Needed to be Organized in Conciliation Memorandum?

If the parties agree on the terms of the agreement, a memorandum of understanding shall be signed.

In this memorandum;

·         The fact that the memorandum is issued in accordance with Article 35 / A of Law No. 1136,

·         Information of parties and attorneys,

·         Place and date that the memorandum is conducted,

·         Brief summary of the parties' arguments and defenses and the subject of conciliation,

·         The agreement reached at the end of the conciliation and the obligations of the parties,

·         Debts and rights granted to each party by a decision of each Party,

·         The fact that according to Article 35 / A of the Law no. 1136, the memorandum shall be in the nature of a court decision in accordance with Article 38 of the Enforcement and Bankruptcy Law no. 2004,

·          Conciliation expenses and if the conciliation occurred after the case litigation fees and expenses, and from which party will be charged,

·         The signatures of the parties and their attorneys’ participating in the conciliation negotiations,

·         The number of copies of the memorandum that are given to the parties and attorneys.

 35/A When Conciliation Can Be Made?

Article 35 / A of the Law has limited the conciliation to be made within a certain time period. Namely; in the relevant article, by saying that ‘’attorneys, together with their clients, may invite the other party to conciliation before a suit has been filed or before hearings have commenced for an already filed suit …’’  it is clearly regulated that such settlement can only be made before the first hearing of the relevant case.

Of course, even after the start of the hearing, there is no obstacle for the parties and their attorneys to make a peace settlement, but in this case, it will not be possible to evaluate the minutes / conciliation agreement under article 35 / A.

Therefore; an agreement to be signed in this way, cannot be considered as in the nature of a court decision that can be enforced in accordance with Article 38 of the Enforcement and Bankruptcy Law No. 2004.

Türçe Versiyonu İçin: http://www.kasaroglu.av.tr/tr/Avukatlik-Kanunu-Madde-35-A-Uyarinca-Uzlasma