Settlement Agreement As A Way Of Resolving Disputes

It is a form of solution that should be considered and prioritised to easily end the conflicts arising from participation banking and finance transactions.

MAGAZINE 01.02.2022, 13:32
Settlement Agreement As A Way Of Resolving Disputes

Settlement, which expresses the termination of disputes and conflicts between people by agreement, provides convenience and speed in resolving legal disputes and conclusion cases. Peace, which brings comfort and functionality to the justice mechanism, has been accepted as the most appropriate way to end legal conflicts throughout human history, with its feature that completely eliminates the hatred and enmity between the parties. Settlement has had an important position both in the laws of ancient civilisations and in today's modern legal systems. In this respect, peace constitutes the purpose and result of solutions such as arbitration, mediation, and an independent institution. In this sense, it is a solution that should be considered and prioritised to easily end all legal disputes in general and conflicts that may arise due to participation banking and finance transactions in particular.

Written sources reveal that almost all ancient civilisations such as Egypt, Babylon, Greece, Assyria, and Rome knew and benefited from the institution of settlement. In Islam, which attaches utmost importance to unity and solidarity, the end of disputes through settlement is accepted as the "best way of behaviour" in the words of the Qur'an. Since the disagreements between people are one of the most critical factors that lead to the deterioration of harmony and order in the society, the word "settlement is the master of judgments" has become parable among Islamic jurists, which is encouraged by various means in the Qur'an and Sunnah to resolve these disagreements. Furthermore, it has been preferred to settle conflicts peacefully throughout the history of Islamic law.

In modern law, it is seen that settlement is regulated in the codes of many countries. However, the place and importance of peace in the codes of these countries are not the same. In the codes of countries such as Germany, France, Italy, Spain, England, the settlement agreement is examined in the sections of the law of obligations devoted to private debt relations, while in the codes of some countries such as Austria, Brazil and Argentina, it is among the general provisions of the law of obligations. German and Austrian laws have included settlement in their civil procedure laws, based on the fact that a settlement agreement can also be made in front of the court.

In the Turkish-Swiss legal doctrine, settlement, which is described as "a contract in which the parties eliminate their disagreements or hesitations about a legal relationship by mutual sacrifice", is not regulated as a separate institution. Still, many acts include provisions regarding this contract. Settlement has also been examined in the Turkish-Swiss legal literature, in the law of obligations/private debt relations works, under the title of "Contracts with a unique structure", and in the "litigation party proceedings" sections in civil procedure law works, taking into account whether it is done inside or outside the court.

In the systematics of classical Islamic law books, settlement has been studied in the special sections called "Kitâbu's-Sulh" or "Babu's-Sulh", considering it in the leading group of "muamalat (transactions)", most of which is today's common term, "law of obligations". In Mecelle, which is one of the first civil laws of the Islamic world, settlement was regulated between 1531- 1571 articles together with ibra (rebate).

The settlement, which is processed under the main title of "muamalat (transactions)" in the modern Islamic law studies that are copyrighted according to the classical systematics, is included in the "Types of Contract (various types of contract)" sections in some new Islamic law studies based on the systematics of Western law. Considering that peace can also be made in front of the court or under the judge's direction, independent Islamic law studies in the field of Islamic procedure are also included.

According to Islamic law, the legal nature of settlement, and therefore the transactions that are subject to its provisions, vary, since the parties can be settled in all 

matters on which they are "authorised to dispose of, waive in exchange for goods or gratuitously". As a result of the joint evaluation of the defendant's response to the plaintiff's claim, the subject of contention between the parties and the settlement price (if any), it can be determined which legal action the settlement is subject to.

While it is required for the parties to make mutual sacrifices to articulate settlement in Western law, such a condition is not sought in Islamic law. In this respect, while settlement is accepted as an entire bilateral contract in Western law, it is sometimes accepted as a bilateral contract and sometimes as a unilateral treaty in Islamic law. Hence, it can be said that the scope of the settlement process is broader in Islamic law than in Western law. According to Islamic law, the feature that distinguishes the settlement process from other contracts or unilateral transactions is a conflict between the parties due to a legal relationship that forms the basis of the settlement. The conflict and disagreement between the parties to the settlement ends. If the settlement is made in front of the court, the case will be dismissed by itself since the subject of the lawsuit will disappear after the end of the conflict. As a result, the parties will have re-arranged their relationship toward whichever legal transaction the settlement is subject to. Now they must comply with all the rights and obligations that will arise from that transaction.

Deputy Chairman of TKBB Advisory Board Prof. Dr. Ertuğrul Boynukalın

Comments (0)
In order to comment, please login
Daily Survey All
Evaluate the 31h Issue of Katılım Finans!
Evaluate the 31h Issue of Katılım Finans!