arbitration & mediation in us & turkey tuncay yildiran supervisor pf.william c.tyson
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ARBITRATION & MEDIATION IN US & TURKEY
Tuncay YILDIRAN
SupervisorPf.William C.TYSON
Alternative Dispute Resolution arbitration mediation early neutral evaluation conciliation mini-trial
Arbitration dispute resolution knowledgeable neutrals binding waiver of the appeal to court
Historical Background Dated back to 1872 Shearson vs. MacMahon 1987
Regulatory Structure Federal Arbitration Act (Title 9 US
Code) Section 6 (1934 Act) Section 15A (1934 Act) Section 19 (1934 Act)
Contractual Basis of ADR compulsory submission written agreement pre-dispute agreements
Eligible Disputes Any disputes arising from or in connection
with the bussines of any member, or arising out of the employment or termination of employment; between or among members; between or among members and associated
persons; between or among members or associated
persons and public customers or others between the customer and nonmember firms
if the parties agreed to arbitrate (NASD)
Types of Claims Customer – Member, Associated
Person breach of fiduciary duty, fraud,
churning Member – Member
raiding, breach of contract Associated Person – Member
discrimination, compensation, unlawful termination of contract
The Arbitrators knowledgeable in securities
markets impartial non employee of sponsoring
organizations
Classification of Arbitrators(Non-public arbitrators) is or within 3 years (5 years in NYSE) was
associated with any securities professional retired from the securities business attorneys, accountants or other
professional who devoted 20 % of his profession to the securities professionals
employees of bank or other financial institutions (NASD)
Classification of Arbitrators(Public Arbitrators) himself the spouse or immediate family
member (household in NYSE)not engaged in securities activities
Number of the Arbitrators disputes arising out the employment
relation employment termination of employment or employment
contracts employment discrimination, sexual
harassment disputes between associated person with
member firms or among member firms disputes between customer and securities
industry
Disputes Arising Out of Employment Rule 10202 and Rule 10203 Rule 10211 and 10212
Claims up to $100,000 one public arbitrator
Claims exceeding $100,000, three public arbitrators
Special requirements for public arbitrators
Industry Disputes (NASD) Claims not exceeding $25,000 (Rule
10203) one non-public arbitrator decision on the pleadings and documents
Claims up to $50,000 (Rule 10202) one non-public arbitrator if the claim is between $25,000-$50,000 and
one of the parties request at the initial filing, three non-public arbitrators
Claims exceeding $50,000 three non-public arbitrators
Industry Disputes (NYSE) by the Board of Arbitrators Claim is not exceeding $25,000
one arbitrator Claim is exceeding $25,000
three arbitrators Rule 607
Disputes Between Customer and the Industry (NASD) Claims not exceeding $25,000 (Rule 10302)
one public arbitrator decision on the pleadings and documents
Claims up to $50,000 (Rule 10308) one public arbitrator if the claim is between $25,000-$50,000 and one
of the parties request a three arbitrator panel at the initial filing, two public/one non-public arbitrators
Claims exceeding $50,000 three public arbitrators, (one non-public/two
public)
Disputes Between Customer and the Industry (NYSE) Claim not exceeding $25,000
($10,000) One public arbitrator decision on the pleadings and
documents Claim exceeding $25,000
($10,000) or the claim not involve any money claim two public-one industry arbitrator
Arbitration Case Flow
Arbitration Case Flow-1(Submission of Claim) submission agreement statement of claim supporting documents required filing fee and hearing
deposit analyze of the submission
Arbitration Case Flow-2(Notification of Respondent) delivery of the claim to respondent reply of the Respondent with required
documents time limitation to reply
NASD simplified arbitration 20 days arbitration other than simplified 45 days
NYSE 20 days
analyze of the reply
Arbitration Case Flow-3(Selection of Arbitrators) NASD
Neutral List Selection System NYSE
Voluntary Supplemental Procedure for Selecting Arbitrators
Random List Selection System Enhanced List Selection System
Arbitration Case Flow-4(Hearings) mandatory except simplified arbitration upon written request of the parties
hearings can be waived participation to the hearings required initial hearing scheduled by the Director
of Arbitration continuing hearings by arbitrators keeping of the records
Arbitration Case Flow-5(Discovery of Dispute) documents provided by parties witnesses voluntary exchange of documents subpoena direct appearance of the third
parties
Arbitration Case Flow-6(Decision and Awards) formation of the decision
materiality and relevance of the evidences
not bind with the rules governing the adminissibility of the evidence
the writing of the award publicity of the award payment of the award
Mediation voluntary informal inexpensive non-binding win-win situation
Eligible Disputes any dispute eligible for arbitration any procedural conflict that arise
during the arbitration under the sole discretion of
Director of Arbitration
Mediation Case Flow
Mediation Procedure-1(Submission of Dispute) no prerequisites before the arbitration during the arbitration
Mediation Procedure-2(Selection of Mediator) from a list or other sources of
parties own discretion from the list provided by Director
of Mediation (NYSE; Director of Arbitration)
appointment by the Director of Mediation/Arbitration
Mediation Procedure-3 (Mediation Session) scheduling session first session generally in meeting
form can be conducted in any means no record kept no subpoena caucuses
Mediation Procedure-4 (Conclusion) settlement declaration of negotiations futile
arbitration process courts
withdraw of mediator or parties for any reason
Mediation vs. Arbitration-1 Expedited negotiation Parties control the
outcome. Mediator has no
power to decide. Settlement only with
party approval. Exchange of
information is voluntary and is often limited.
Adjudication Arbitrators control
the outcome. Arbitrator is given
power to decide. Final and binding
decision. Often extensive
discovery is required.
Mediation vs. Arbitration-2 Process is informal.
Parties are active participants.
Joint and private meetings between individual parties and their counsel.
Outcome based on needs of parties.
Result is mutually satisfactory
Low cost. Private and confidential.
Process is formal. Attorneys control party participation.
No private communication with the arbitrator.
Decision based on facts, evidence, and law.
Result is win/lose award More expensive than
mediation, Private (but decisions are
publicly available).
Dispute Resolution in Turkey Istanbul Stock Exchange
(administrative settlement of disputes)
Association of Capital Market Intermediary Institutions of Turkey (formerly mediation, with the amendment arbitration)
Eligible Disputes ISE sponsored administrative
settlement of disputes the disputes arising from exchange
affairs and transactions ACMIIT sponsored arbitration
the disputes arising other than exchange affairs and transactions
Administrative Settlement of Disputes compulsory for member firms voluntarily for customers decision made by Board of Directors Committee of Disputes assist right to appeal CMB awards paid by member, otherwise
collection of the award from the deposits
ACMIIT Sponsored ADR established in February 11, 2001 until march 11, 2003 mediation with the amendment arbitration no regulation yet