The Court Of Cassation Changes Its Precedent On Post-Mediation Arbitration (Med-Arb) Agreements

Recent Development

The 3rd Civil Chamber of the Court of Cassation, in its decision dated 15 January 2026 with file no. 2025/5452 E. and decision no. 2026/129 K. (the "Decision"), ruled that the arbitration clause commonly found in legal services fee agreements "disputes shall first be resolved through mediation; if no settlement is reached, the dispute shall be resolved by the Bar Arbitration Board; the Union of Turkish Bar Associations Arbitration Rules form an integral part of this agreement" is valid. The Chamber has thus changed its settled precedent by reversing its earlier decision on the same issue.

What does the Decision Say?

In the Decision, the 3rd Civil Chamber of the Court of Cassation examined alternative dispute resolution methods in detail and emphasized that the combined use of mediation and arbitration is widely accepted in both legal scholarship and practice as "Med-Arb". The Chamber found that the clause in the parties' agreement dated 1 March 2022 clearly and unequivocally provided that, if mediation failed, the dispute would be resolved directly by the Bar Arbitration Board.

Under the relevant provisions of Law No. 6325 on Mediation in Legal Disputes and Article 412 of the Code of Civil Procedure, the Chamber held that such a clause unambiguously reflects the parties' intention to arbitrate. It also rejected all objections regarding the arbitrator's impartiality, the arbitration period, and compliance with procedural rules.

Moreover, the Chamber specifically highlighted that Article 5 of Law No. 6325 opens the door to arbitration following mediation, that parties are free to choose the arbitration route, and that hybrid agreements of this kind do not violate public policy. In the concrete case, it confirmed that the arbitrator's appointment by the Union of Turkish Bar Associations Arbitration Board, the Board's decision to allow the arbitrator to continue despite impartiality objections, and the equal opportunities granted to both parties throughout the proceedings were all in accordance with the rules of procedure.

Ultimately, having found no grounds for annulling the arbitral award, the Chamber upheld the Regional Court of Appeal's resistance decision and definitively confirmed that the arbitral award remains in force. This approach significantly strengthens the legal certainty of Med-Arb agreements.

What did the Previous Precedent Say?

In its earlier reversal decision dated 15 April 2025 with file no. 2025/225 E. and decision no. 2025/2164 K., the same Chamber had ruled that the same arbitration clause was invalid. The reasoning was that giving priority to mediation in the contract prevented the arbitration intention from being sufficiently clear and definite, rendering the arbitration agreement inherently ambiguous and open to debate because of this precondition.

At that time, the Chamber argued that the phrase "first mediation" made the arbitration intention conditional and uncertain, and that the parties had not expressed a clear and unequivocal will to arbitrate. It therefore held that the arbitrator lacked jurisdiction for disputes arising from the 1 March 2022 agreement and that the arbitral award should be partially annulled in respect of that part.

The logic behind the reversal decision was based on the classical jurisprudence requiring arbitration clauses to be clear and free of any doubt or ambiguity. That earlier decision had created significant uncertainty for contracts containing similar Med-Arb provisions at the time and increased the risk of annulment for many arbitral awards.

Conclusion

This Decision is of major importance not only for legal services fee agreements but also for Med-Arb (post-mediation arbitration) type clauses that are frequently used in commercial contracts and other agreements. With this ruling, the 3rd Civil Chamber of the Court of Cassation has clearly confirmed the validity of Med-Arb type arbitration clauses.

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