Energy disputes, unfortunately, often continue for years in the Judicial system due to the lack of specialized expert witnesses and judges with expertise in Energy Law. Therefore, we believe that resolving both judicial and administrative disputes related to Energy Law through alternative dispute resolution methods, primarily mediation, serves the best interests of the parties. The dynamic nature of the energy sector creates a need for swift resolution of disputes, and principles such as confidentiality in mediation, which protect trade secrets, make mediation particularly valuable in energy-related conflicts.
Considering the volume and nature of private law transactions over which parties in the energy sector can freely exercise their rights, the expertise of mediators in this field will facilitate and enhance the resolution of disputes. Additionally, more specialized legal regulations concerning consumers who benefit from services such as electricity and natural gas require distinct expertise within the framework of consumer law.
The energy sector in Turkey underwent a major structural transformation in 2001. In this new era, which aimed to establish a financially strong, stable, transparent, and competitive energy market, the sector was reshaped through legislative reforms, with laws regulating the energy market such as the Electricity Market Law, Natural Gas Market Law, and Petroleum Market Law coming into effect. Considering the volume and nature of private law transactions over which parties in the energy sector can freely exercise their rights, the expertise of mediators in this field will both facilitate and enhance the resolution of disputes.
Energy disputes are the type of conflicts that, by their nature, are in the parties’ best interest to resolve through alternative dispute resolution methods, primarily mediation.
Mediation in the Electricity Market
Electric supply agreements are, in general terms, contracts concluded between the electricity provider and the subscriber. Within this framework, an electricity supply agreement refers to contracts between wholesale producers and suppliers, between suppliers and end consumers, and between network operators and users. In other words, while electricity supply agreements encompass system connection, system access, and electricity sales in a single framework, the Electricity Market Law establishes different types of contracts with distinct parties, subjects, terms, and conditions.
Accordingly, electricity supply agreements include the “bilateral agreement,” the “retail sale agreement,” and the “connection and system usage agreement.” Bilateral agreements are defined in Law No. 6446 as “commercial agreements made between real or legal persons for the purchase and sale of electricity and/or capacity, subject to private law provisions, and not subject to Board approval.” This definition clearly indicates that these agreements are governed by private law (Electricity Market Law No. 6446, Art. 3/j).
Although the law does not provide a definition for the retail sale agreement, the Electricity Market Consumer Services Regulation (“EPTHY”) defines it as: “A contract for a usage site with an existing connection agreement, concluded between the designated supplier and the consumers in accordance with the relevant legislation, covering the terms and conditions regarding the supply of electricity and/or capacity under the retail sales tariff or last-resort supply tariff and related service procurement activities.” Therefore, the retail sale agreement is also governed by private law. Disputes arising from these agreements are suitable for alternative dispute resolution methods, such as mediation.
Electric energy is functionally divided into Production, Transmission, Distribution, Electricity Supply, and Electricity Procurement. Specific regulations, including the Electricity Market Law, secondary legislation, and related regulations, have been enacted in this field. Energy contracts in the electricity sector concern the transfer of electricity from the producer to the consumer. Regarding mandatory mediation, we believe that disputes falling outside the scope of regulatory actions and that can be adjudicated in judicial courts are subject to mediation.
Mediation in the Petroleum Market
Fuel is defined in Article 2 of the Petroleum Market Law No. 5015, under the section on definitions and abbreviations. According to this definition, fuel includes “types of gasoline, naphtha (excluding raw and solvent naphtha), kerosene, jet fuel, types of diesel, types of fuel oil, and other products determined by the Authority.” According to the Petroleum Market Law, activities in this field include refining, processing, lubricating oil production, storage, transportation, operations for free users and export purposes, establishment and/or operation of facilities for these purposes, as well as fuel distribution, transportation, and dealership activities.
In the fuel market, numerous contracts are concluded between refineries, distributors, and dealers. Unlike general dealership agreements, intermediaries, suppliers, retailers, and wholesalers cannot be parties to a fuel dealership agreement. Only a licensed distributor can supply fuel to a licensed dealer authorized to provide fuel to the end consumer. This restriction is mandated by Article 8 of the Petroleum Market Law (PPL). According to this provision, by legal requirement, the parties to a dealership agreement can only be distribution companies and dealers. This provision is mandatory, and the parties cannot agree otherwise. Therefore, it can be said that the freedom to choose the counterparty in a fuel dealership agreement is limited. In such cases, where contractual freedom is restricted, there is an obligation to contract with persons meeting certain conditions. Accordingly, a dealer may enter into the agreement with a licensed distributor, and a distributor may contract with a licensed dealer who is not affiliated with any other distribution company.
In light of the information explained above, it is evident that the fuel distribution model is subject to mandatory provisions under the Petroleum Market Law (PPL). The reasons for these mandatory provisions can be attributed to the nature of fuel, its importance in industry and consumption, supply-related issues, and the resulting need for standardization. Therefore, it can be said that the parties’ contractual freedom in fuel-related relationships is limited.
Unlike other private law relationships, the content freely determined by the parties in fuel-related contracts is more restricted. For example, a distributor may supply fuel only to a dealer with whom it has a fuel dealership agreement, and the dealer must first hold a license. The dealer can procure products only from the distributor included in its distribution network by contract. This demonstrates the limitation on the freedom to choose the counterparty.
Additionally, the fuel distribution relationship contains mandatory provisions that directly affect the content of the contract. For instance, license holders for distribution activities are obliged to notify the Energy Market Regulatory Authority (EPDK) of sample agreements related to their primary operations and any proposed changes before implementation. Accordingly, standard agreements (dealership agreements and protocols) prepared by distribution companies for dealers must be submitted to the Authority, and any modifications to these agreements must also be reported. Agreements based on pre-notified standard contracts clearly constitute an intervention in contractual freedom. However, it should not be forgotten that parties may also conclude mutually negotiated agreements through additional protocols outside the main contract to suit their interests.
In fuel distribution agreements, the disputes over which the parties can freely exercise their rights, and which are therefore suitable for mediation, include the following:
Increasing or decreasing the minimum purchase quantity specified in the contracts between fuel distribution companies and dealers, Mediation in the Petroleum Market
Claims for penalties arising from minimum purchase quantities,
Breaches arising from the distributor’s failure to supply fuel in compliance with regulations and meeting the requested quantity,
Disputes arising from the violation of the exclusive purchase obligation,
Disputes arising from the distributor’s failure to fulfill the information disclosure obligation,
Claims arising from breaches of loyalty obligations by the distributor and the dealer,
Disputes between the parties regarding the determination of the fuel sale price,
-Disputes arising from the usufruct rights granted on land provided by the dealer himself
-Disputes between the dealer and the distributor regarding the products to be sold at the station, the services to be offered, and the operation of the market within the station
-Claims arising between the distributor and the dealer regarding the reasons for the termination of the contract and the consequences of such termination.
MEDIATION IN THE MINERAL MARKET
Mediation in the Mining Market
Minerals are under the sovereignty and control of the state, and the right to explore and operate them belongs to the state. The state may transfer this control to public economic institutions or to real and legal persons for certain periods. According to Article 168 of the Constitution of the Republic of Turkey, resources under the sovereignty and control of the state, due to their economic and strategic importance, are regulated by a special and separate law, outside the scope of general legislation such as the Civil Code and the Code of Obligations.
Mediation in the Mining Market
Based on this constitutional provision, the Mining Law No. 3213 came into force on June 15, 1985. On February 16, 1994, Law No. 3971, amending a provision of the law regulating the operation of Boron Salts, Trona, and Asphaltite Mines, as well as Nuclear Energy Raw Materials, and the return of certain Lignite and Iron fields, entered into force. This law excluded these areas from the Mining Law and subjected them to a separate regulation. Law No. 3971 amended Article 2 of Law No. 2840, introducing the provision that: “The exploration and operation of boron salts, uranium, and thorium mines shall be carried out by the State.” This allowed the private sector to explore and operate trona and asphaltite mines.
On June 5, 2004, Law No. 5177 was published and came into force. This law repealed certain articles of Mining Law No. 3213, which had entered into force on June 15, 1985, and amended others. Alongside the 3213 Mining Law, the “Regulation on the Implementation of the Mining Law”, issued based on this law and published in the Official Gazette No. 18850 on August 22, 1985, guided its practical implementation. Mining permit procedures were carried out under the Mining Activity Permit Regulation, published in the Official Gazette No. 25857 on June 21, 2005.
Under the new provisions introduced by Law No. 5177, mining activities were conducted according to the Mining Law Implementation Regulation, published in the Official Gazette No. 25716 on February 3, 2005. Subsequently, the Mining Activity Implementation Regulation was published on November 6, 2010, in the Official Gazette No. 27751. Additionally, the Mining Regulation, published on September 21, 2017, in the Official Gazette No. 30187, established the principles for granting rights for a certain period to real and legal persons by the Ministry, for the purpose of exploring, operating, developing, and producing state-owned mineral resources under the sovereignty and control of the Republic of Turkey, in line with national interests, under the Mining Law No. 3213 dated June 4, 1985.
Finally, on February 14, 2019, Law No. 7164, amending certain laws and decree laws, introduced further changes, and the competent authority was reorganized as the General Directorate of Mining Affairs (MAPEG).
Legal Issues in Mining and Mediation
Legal disputes related to mining, such as those arising from licenses and mining permits, expropriation, and other administrative actions or contracts, are heard and resolved in administrative courts. Additionally, disputes under build-operate-transfer (BOT) agreements or public concession contracts can be resolved through arbitration.
Licenses granted for the exploration and operation of mines constitute individual administrative acts completed unilaterally by the administration. Through these permits, the State grants certain powers to private individuals for the exploration and operation of mines under its sovereignty and control. Therefore, disputes arising in this context fall within the jurisdiction of administrative courts.
Moreover, the expropriation by the administration of privately owned immovable property necessary for mining operations, when public interest exists, is a typical administrative act. Cases filed for the annulment of such expropriation actions also fall under the jurisdiction of administrative courts.
Disputes concerning the transfer of mining rights, the inheritance of mining rights, pledges of mineral ore, mining mortgages, mining rents, as well as disputes arising from liens, precautionary measures, or the judicial sale of a mine fall under the jurisdiction of civil courts. Accordingly, disputes between mine operators and their employees or third parties are civil law matters and must be resolved in labor courts.
Additionally, claims regarding the determination of expropriation compensation or claims arising from de facto expropriation without formal expropriation also fall within the jurisdiction of civil courts.
The fact that mining law disputes are resolved by different specialized courts, and that the legal outcome required for each type of dispute differs, means that alternative dispute resolution methods are sought, given the differences in judicial procedures and principles. Mediation emerges as a reasonable solution for resolving mining disputes efficiently and for ensuring sound decisions.
Given the nature and characteristics of these disputes, mediation allows for flexibility and the participation of technical consultants, mining law experts, and individuals knowledgeable about the technical and economic aspects of mining.
In this context, the suitability of mediation for disputes heard in civil courts must be considered. Disputes arising from the inheritance of mining rights, pledges of mineral ore, mining mortgages, liens, precautionary measures, or the judicial sale of a mine fall under the jurisdiction of civil courts. Conflicts between employees and their employers in mining operations are resolved in labor courts. Legal disputes arising from royalty agreements (rödövans) are also within civil jurisdiction. For debts, receivables, and other disputes of state enterprises with private law legal personality, commercial courts have authority.
Agreements made by license holders with third parties or organizations to grant them the right to operate all or part of a licensed mining area for the purpose of producing and utilizing the minerals are referred to as Royalty (Rödövans) Agreements.
In a rödövans agreement, the legal relationship between the administration, the license holder, and the royalty operator is governed by administrative law, while the legal relationship between the royalty operator and the license holder is governed by the principles and rules of private law, outside the scope of administrative law.
We are of the opinion that disputes arising from these agreements, particularly those under royalty (rödövans) contracts between the royalty operator and the license holder, are suitable for mediation.