Regulation on Consumer Arbitration Committees in Light of the New Amendments

The previous Regulation on Consumer Arbitration Committees, published in the Official Gazette No. 29188 dated 27 November 2014, has been repealed and replaced by the new Regulation. The amendments introduced by the new Regulation are summarized below:

1. Mandatory Application Requirement to Consumer Arbitration Committees

Without prejudice to the rights granted under the Enforcement and Bankruptcy Law No. 2004, applications to consumer arbitration committees have become mandatory for disputes with a value below TRY 30,000.

Applications to consumer arbitration committees will no longer be available for disputes exceeding this monetary threshold. Considering that the monetary limit has been set at a relatively high level, serious grievances may arise due to the fact that committee decisions may constitute precedents and are enforceable through execution proceedings based on judgments.

2. Additional Information Required in Applications

Additional information requirements have been introduced for all applications submitted to consumer arbitration committees.

The newly required information includes:

• Passport number or foreign identity number for foreign citizens,

• Tax identification number and address of the applicant if the applicant is not a consumer,

• Other available contact details,

• Name, surname, tax identification number, and address of the applicant’s legal representative, if any.

This provision will enter into force on 1 January 2023.

3. Completion of Missing Information or Documents

Where mandatory information required for applications contains deficiencies or inconsistencies, the chairperson of the arbitration committee may request additional information or documents from the applicant by granting a period of seven days through written notification.

This amendment may have positive consequences for consumers, as it provides an opportunity to complete incomplete applications.

This provision will enter into force on 1 January 2023.

4. Restriction on Repeated Applications After Final Decisions

Once a decision issued by a consumer arbitration committee regarding a dispute becomes final, a new application cannot be made if the subject matter, legal basis, and parties are identical to the finalized decision.

Furthermore, in cases where there is a pending dispute or an existing final judgment, the committee will reject the application.

This amendment imposes an obligation on arbitration committees to determine whether a final judgment exists and is expected to contribute positively to procedural economy.

5. Extension of Decision Notification Period and Electronic Notification

The period for notifying decisions has been extended from 10 business days to 15 business days.

A new regulation regarding electronic notification has also been introduced. Accordingly, decisions of consumer arbitration committees shall be notified to the parties within 15 business days from the date of the decision. If the parties are represented by lawyers, notification shall be made electronically to the lawyers in accordance with Article 107/A of the Tax Procedure Law.

In this context, the provisions of Article 7/a of the Notification Law shall primarily apply. If electronic notification cannot be made, decisions shall be sent by registered mail in accordance with the provisions of the Notification Law.

Requests for information and documents are also included within this scope.

6. Decision Period and Extension Period

The provision stipulating that applications shall be reviewed and decided within a maximum period of six months according to the order and date of application has been maintained.

However, the extension period has been amended. While the previous regulation allowed an extension of up to six months, the new Regulation limits the extension period to a maximum of three months.

7. Procedure for Completing Decisions

A new procedure regarding the completion of decisions has been introduced.

Without requiring a new application, parties may request completion of the decision within 15 days following notification of the decision if certain issues included in their original requests were not addressed.

In addition, the Regulation provides detailed rules regarding the matters that must be included in completion decisions.

8. Competent Consumer Arbitration Committee and Objection Procedures

Consumers may submit their applications to the consumer arbitration committee located either:

• At the consumer’s place of residence, or

• At the place where the consumer transaction was carried out.

Regarding objections against arbitration committee decisions, the parties may file an objection within 15 days from the notification date before:

• The consumer court located where the consumer arbitration committee is located, or

• The consumer court located at the consumer’s place of residence.

With this amendment, consumer courts at the consumer’s place of residence have also been granted jurisdiction regarding objections.

9. Changes Regarding Objection Actions Against Decisions in Favor of Consumers

An important amendment has been introduced regarding lawsuits filed against arbitration committee decisions rendered in favor of consumers.

Accordingly, if a party submits information or documents that already existed during the arbitration committee proceedings but were not previously submitted, and the consumer court cancels the committee decision based on such documents, the consumer shall not be ordered to pay litigation expenses or attorney fees as a result of the proceedings.

This regulation emphasizes the importance for consumers to properly prepare, preserve, and archive documents that may be used in their defense before arbitration committees.

Although introduced with the intention of protecting consumers, this provision may potentially create consequences against consumers by disrupting the balance between arbitration committees and consumers in favor of the committees.

10. Allocation of Costs Where the Dispute Becomes Moot

If a dispute submitted before a consumer arbitration committee becomes without subject matter, the committee shall decide that there is no need to issue a decision.

In such cases, notification expenses and expert examination fees shall be paid by the party who submits a waiver or acceptance declaration within one month from notification of the decision to the relevant tax office.

If the party submitting the waiver or acceptance declaration is the consumer, these expenses shall be covered by the Ministry.

Under previous practices, disputes were generally resolved quickly in favor of both consumers and sellers/providers, allowing sellers to resolve consumer complaints before the dispute was formally concluded.

However, under the new regulation, sellers may be less inclined to choose this method, which may indirectly result in disadvantages for consumers.

11. Pending Applications Submitted Before the Effective Date

The new Regulation shall also apply to applications submitted to consumer arbitration committees before its entry into force but which have not yet been decided.

This provision may lead to significant loss of rights for consumers, as applications that complied with the previous Regulation but fall below the new monetary threshold may need to be rejected.

Therefore, this amendment raises discussions in terms of fundamental legal principles, including:

• The right to seek legal remedies,

• The right to a fair trial.

12. Effective Dates of Remaining Provisions

Except for the provisions whose effective dates are specifically stated above, all other provisions of the Regulation shall enter into force as of October 2022.

Conclusion and Evaluation

The Regulation aims to improve the rights of both consumers and sellers/service providers and accelerate the procedures before consumer arbitration committees. In this respect, significant amendments and innovations have been introduced.

However, it should also be noted that certain provisions within the Regulation may produce consequences contrary to the intended purpose of the amendments and may negatively affect consumer rights.

The full text of the Regulation published in the Official Gazette can be accessed through the relevant source.

Submitted for your information and evaluation.