by Mr. Turgut Aycan Özcan, LL.M.
Türkiye: International Arbitration
What legislation applies to arbitration in your country? Are there any mandatory laws?
In Türkiye, the arbitral proceedings are regulated under the Turkish Code of Civil Procedure numbered 6100 (TCCP) and the Turkish International Arbitration Law numbered 4686 (TIAL). The legislator has preferred to make a distinction between domestic arbitration proceedings and international arbitration proceedings and regulated the domestic arbitration under TCCP whereas international arbitration was regulated under TIAL.
Apart from afore-mentioned legislation on international and domestic arbitration, there are also arbitration rules issued by several arbitration institutions such as Istanbul Arbitration Centre, Arbitration Centre of Istanbul Chamber of Commerce, Energy Disputes Arbitration Centre and Organization of Islamic Corporation Arbitration Centre, which will be explained in a detailed manner in the following answers.
Is your country a signatory to the New York Convention? Are there any reservations to the general obligations of the Convention?
Türkiye is one of the signatories of the New York Convention. Türkiye has made a reservation with respect to application of the New York Convention only to disputes of a commercial nature.
What other arbitration-related treaties and conventions is your country a party to?
Apart from the New York Convention, Türkiye is also a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID), the European Convention on International Commercial Arbitration, the Singapore Convention and the Energy Charter Treaty (ECT).
Is the law governing international arbitration in your country based on the UNCITRAL Model Law? Are there significant differences between the two?
While TIAL is mainly based on the UNCITRAL Model Law, there are also some differences between two. Key differences can be summarized as follows:
In Türkiye international and domestic arbitration laws are regulated under different codes namely TIAL and TCCP, whereas the UNCITRAL Model Law focuses only on international arbitration.
Both UNCITRAL Model Law and TIAL provide wide discretion to the parties on the number and appointment of arbitrators and include transparent procedures for challenging and replacing arbitrators. In addition to this, TIAL also sets out detailed institutional procedures for challenge and replacement, including when court intervention may be required.
UNCITRAL Model Law empowers the arbitral tribunals to order interim measures and specifies broad types of interim relief, facilitating preservation of assets and evidence. Similarly, TIAL also grants wide powers to the tribunals on the interim measures. On the other hand, TIAL explicitly restricts the tribunals’ authority to render interim attachment. Accordingly, the tribunals do not have power to issue any interim attachments which should be enforced by the judicial authorities such as execution directorates.
UNCITRAL Model Law limits the court intervention to specific situations to balance efficiency and oversight. Hence, the courts mainly assist in matters like the appointment of arbitrators and enforcement actions. On the other hand, TIAL prescribes more detailed procedures regarding courts’ involvement in the arbitral proceedings, particularly on the matters such as validity of arbitration agreements and arbitrator challenges to ensure balance between autonomy of the arbitral proceedings and the procedural integrity under national laws.
While there is no strict time limits prescribed under UNCITRAL Model Law imposed beyond reasonable procedural conduct, TIAL prescribes specific time limits for certain arbitration steps, reflecting a preference for expedited resolution of the disputes.
Are there any impending plans to reform the arbitration laws in your country?
Since the arbitration laws (i.e. TIAL and TCCP) in Türkiye are relatively new legislations, to the best of our knowledge there is no impending plan to reform these laws. Having said this, in order to unify the procedures prescribed for international and domestic arbitration proceedings, there may be some legislative preparations in the future for a new arbitration law which shall be applicable to both international and domestic arbitration cases.
What arbitral institutions (if any) exist in your country? When were their rules last amended? Are any amendments being considered?
The main arbitration institutes in Türkiye are İstanbul Arbitration Centre (ISTAC), Arbitration Centre of İstanbul Chamber of Commerce (ITOTAM), Energy Disputes Arbitration Centre (EDAC), Arbitration Centre of the Union of Chambers and Commodity Exchanges of Türkiye (TOBBUYUM), and the Organization of Islamic Cooperation Arbitration Centre (OIC-AC).
ISTAC Arbitration Rules have been amended in April 2020 to allow arbitration applications and proceedings to be conducted online.
Is there a specialist arbitration court in your country?
While there are several Turkish arbitration institutions, which are explained above, rendering dispute resolution services, there is not any specialist arbitration court in Türkiye. On the other hand, it is also noteworthy that several chambers of the Appeal Courts and the Court of Cassation have wide knowledge and experience on arbitration and arbitration-related disputes.
What are the validity requirements for an arbitration agreement under the laws of your country?
Under Turkish law, in principle, the conditions for the validity of a contract also apply to arbitration agreements. Accordingly, the requirements of the parties’ capacity to enter into a contract, the absence of collusion, or the absence of an impairment of will are also required for arbitration agreements. In addition to these, there must also be special validity conditions. First of all, there must be a clear intention of the parties to arbitrate and such intent to arbitrate must be clearly understood from the contract.
In addition, there is a written form requirement set forth in Article 4 of TIAL International and Article 412 of TCCP. According to the definition of arbitration agreement both in TIAL and TCCP, the dispute must be definite or determinable.
The dispute must also be arbitrable. The arbitrability of the dispute is important for the recognition and enforcement of awards. Arbitrability can be limited with mandatory law provisions.
For instance, Article 1 of TIAL and Article 408 of TCCP provide that the disputes related to rights in rem concerning immovables and that are not within the parties’ disposal are not arbitrable.
Are arbitration clauses considered separable from the main contract?
The separability principle is accepted under Turkish Arbitration Law. As per Article 412(4) of TCCP regulating domestic arbitration, no party can object to an arbitration agreement based on the ground that the main contract is invalid. Similarly, Article 7 (H) (1) of TIAL regulating international arbitration stipulates that the arbitrator or arbitral tribunal may decide on its own jurisdiction, including challenges to the existence or validity of the arbitration agreement. In making this decision, the arbitration clause in a contract shall be considered independently of the other provisions of the contract. A decision of the arbitrator or arbitral tribunal declaring the main contract null and void shall not automatically result in the nullity of the arbitration agreement.
Do the courts of your country apply a validation principle under which an arbitration agreement should be considered valid and enforceable if it would be so considered under at least one of the national laws potentially applicable to it?
Turkish courts generally apply the validation principle with regard to arbitration agreements provided that the relevant dispute is considered arbitrable under mandatory provisions of Turkish law (i.e. the dispute should not be related to the rights in rem regarding immovables and it should be within the parties’ disposal). This approach supports a fair and international alignment in resolving arbitration-related disputes, reflecting a pro-arbitration stance and an intention to offer recourse that respects the parties’ original agreement to arbitrate.
Is there anything particular to note in your jurisdiction with regard to multi-party or multi-contract arbitration?
While TIAL and TCCP do not provide explicit provisions on the joinder of additional parties, different arbitration institutions have specific rules regarding multi-party arbitration. For instance, as to multi-contract arbitration, Article 10 of ISTAC Arbitration Rules provides that if the claims and relief sought between the parties arise out of, or in connection with more than one contract, they may be settled in a single arbitration on the condition that all of the contracts refer to arbitration under the Rules and that the arbitration agreements are compatible with each other. Besides, in accordance with Article 11 of ISTAC Arbitration Rules, ISTAC Board may allow the consolidation of two or more arbitration cases under certain circumstances upon the request of any party.
Similarly, the Arbitration Centre of Istanbul Chamber of Commerce (ITOTAM) has specific rules with respect to claims between multiple parties (Article 15) and consolidation of arbitration cases (Article 16).
In what instances can third parties or non-signatories be bound by an arbitration agreement? Are there any recent court decisions on these issues?
Third parties or non-signatories can be bound by an arbitration agreement only if those third parties or non-signatories had clear consent to be bound by the arbitration agreement in question. Turkish courts also acknowledge this legal approach. For example, a recent decision of the General Chamber of the Court of Cassation dismissed a setting-aside request from a claimant who was not a party to the arbitration agreement but had, in prior proceedings, relied on the arbitration agreement to assert jurisdiction objections.
Are any types of dispute considered non-arbitrable? Has there been any evolution in this regard in recent years?
As explained in the answer to Question 8, Article 1 of TIAL and Article 408 of TCCP state that disputes related to rights in rem concerning immovables and those not within the parties’ disposal are non-arbitrable. This typically includes disputes in criminal law, as they cannot be freely resolved by the parties.
Are there any recent court decisions in your country concerning the choice of law applicable to an arbitration agreement where no such law has been specified by the Parties?
Under Article 8(a) of TIAL, the parties are free to agree on the procedural law applicable to arbitration. In the absence of an agreement, the arbitral tribunal will apply TIAL’s provisions. Although no recent case directly addresses this, decisions like the Court of Cassation’s 2019 ruling referred to Article 8 in discussing the validity of arbitration objections raised during first-instance court proceedings.
How is the law applicable to the substance determined? Is there a specific set of choice of law rules in your country?
Article 12(c) of TIAL states that arbitral tribunals should apply the substantive law chosen by the parties, and they may take into account applicable trade practices and usages. If the parties haven’t chosen a law, the tribunal applies the law of the country with the closest connection to the dispute.
In your country, are there any restrictions in the appointment of arbitrators?
Appointment of arbitrators is regulated under TIAL for international arbitral proceedings and under TCCP for domestic arbitral proceedings. Article 7 of TIAL states that the parties are free to determine the number of arbitrators, though it must be odd. If no number is specified, three arbitrators will be appointed. Arbitrators must be natural persons, impartial, independent, and meet any qualifications agreed upon by the parties. Additional restrictions apply for nationality in cases of sole arbitrators or tribunals of three arbitrators, aiming to ensure impartiality.
Are there any default requirements as to the selection of a tribunal?
Yes. TIAL outlines the default procedures for tribunal selection. If the parties are unable to agree on an arbitrator, the civil court of first instance appoints the arbitrator in a sole-arbitrator case. In cases with three arbitrators, each party appoints one, and the two appointed arbitrators choose the third, who acts as chairman. If these processes fail, the civil court intervenes to finalize the tribunal composition.
Can the local courts intervene in the selection of arbitrators? If so, how?
As outlined in Question 17, local courts may intervene in selecting arbitrators if the parties cannot agree on a sole arbitrator or if arbitrators are unable to select a chairman in multi-member tribunals. Courts may also appoint arbitrators if a third party empowered to appoint fails to act.
Can the appointment of an arbitrator be challenged? What are the grounds for such challenge? What is the procedure for such challenge?
Either party may challenge an arbitrator’s appointment based on agreed qualifications, procedural rules, or justifiable doubts regarding impartiality or independence. Challenges must be submitted within 30 days of becoming aware of circumstances warranting a challenge. If the challenge is rejected by the tribunal, the challenging party may apply to the civil court of first instance for a final decision.
Have there been any recent developments concerning the duty of independence and impartiality of the arbitrators, including the duty of disclosure?
TIAL mandates independence and impartiality for arbitrators, requiring disclosure of any circumstances that may raise doubts about these qualities. This duty is in line with international standards like the IBA Guidelines on Conflicts of Interest in International Arbitration, which have indirectly shaped Turkish arbitration practices.
What happens in the case of a truncated tribunal? Is the tribunal able to continue with the proceedings?
Under Article 13(a) of TIAL, tribunal decisions must be made by a majority of its members unless the parties agree otherwise. If authorized, the presiding arbitrator may make certain procedural decisions alone. Generally, Turkish arbitration law requires a full tribunal to render binding awards unless otherwise agreed upon by the parties.
Are arbitrators immune from liability?
Article 7(e) of TIAL stipulates that, unless agreed otherwise by the parties, an arbitrator who fails to perform their duties without justifiable reason is liable for damages incurred as a result. This provision is mirrored in Article 419 of TCCP for domestic arbitration.
Is the principle of competence-competence recognized in your country?
Yes. Turkish arbitration law embraces the principle of competence-competence. Article 7(h)(1) of TIAL allows arbitrators to rule on their own jurisdiction, including challenges to the arbitration agreement’s validity, independently of the main contract’s validity. Similarly, Article 422 of TCCP applies this principle in domestic arbitration.
What is the approach of local courts towards a party commencing litigation in apparent breach of an arbitration agreement?
Article 5 of TIAL permits a respondent to file a preliminary objection if a dispute is brought before a court despite an arbitration agreement. If upheld, the court dismisses the case due to lack of jurisdiction.
What happens when a respondent fails to participate in the arbitration? Can the local courts compel participation?
TIAL and TCCP provisions allow proceedings to continue even if a respondent does not participate or submit a defense. The tribunal may proceed and make a decision based on available evidence. Turkish law, however, does not authorize courts to compel parties to participate in arbitration proceedings.
Can third parties voluntarily join arbitration proceedings? If all parties agree to the intervention, is the tribunal bound by this agreement? If all parties do not agree to the intervention, can the tribunal allow for it?
Turkish arbitration law is based on party autonomy and does not specifically address third-party intervention in arbitration proceedings under TIAL or TCCP. However, some arbitration rules, like those of ITOTAM, allow for third-party joinder under certain circumstances. Generally, a third party can only join if all parties and the tribunal consent.
What interim measures are available? Will local courts issue interim measures pending the constitution of the tribunal?
TIAL and TCCP authorize arbitral tribunals to issue interim measures, including asset preservation, escrow deposits, and security for costs. However, tribunals cannot enforce measures requiring judicial execution. Courts may issue interim measures upon request, even if arbitration proceedings are pending, and can enforce tribunal-ordered measures when necessary.
Are anti-suit and/or anti-arbitration injunctions available and enforceable in your country?
Although Turkish law does not explicitly provide for anti-suit or anti-arbitration injunctions, courts and tribunals can issue protective measures to preserve assets or secure arbitration proceedings. Parties may also seek court assistance for interim measures if tribunal-issued measures are violated.
Are there particular rules governing evidentiary matters in arbitration? Will the local courts in your jurisdiction play any role in obtaining evidence? Can local courts compel witnesses to participate in arbitration proceedings?
Under Article 12 of TIAL, the tribunal may set evidence submission deadlines and request court assistance in collecting evidence. TCCP contains similar provisions for domestic arbitration, while ISTAC and ITOTAM rules also provide detailed evidentiary guidelines. Local courts may assist in evidence gathering but cannot compel witness participation in arbitration.
What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your country?
The Attorney Law (Law No. 1136) and the Turkish Bar Association’s code of conduct set ethical standards for lawyers, covering confidentiality, loyalty, and integrity. TIAL and TCCP emphasize arbitrators’ impartiality, independence, and duty to disclose potential conflicts, aligning with international standards like the IBA Guidelines on Conflicts of Interest in International Arbitration.
In your country, are there any rules with respect to the confidentiality of arbitration proceedings?
Although TIAL and TCCP do not explicitly mandate confidentiality in arbitration proceedings, several Turkish arbitration institutions have confidentiality provisions. For instance, ISTAC Arbitration Rules specify that proceedings are confidential unless the parties agree otherwise. ITOTAM Arbitration Rules also mandate confidentiality for parties, arbitrators, witnesses, and all individuals involved in the arbitration.
How are the costs of arbitration proceedings estimated and allocated? Can pre- and post-award interest be included on the principal claim and costs incurred?
According to Article 16 of TIAL, the fees of arbitrators are determined based on factors such as the dispute amount, nature of the case, and duration of proceedings. If parties do not reach an agreement, fees follow a schedule set by the Ministry of Justice. Arbitration costs include arbitrators’ fees, travel, expenses for experts, and attorney fees. There is no prohibition under Turkish law against awarding pre- and post-award interest.
What legal requirements are there in your country for the recognition and enforcement of an award? Is there a requirement that the award be reasoned, i.e., substantiated and motivated?
The recognition and enforcement of foreign arbitral awards are governed by the Turkish International Private and Procedural Law (IPPL) No. 5718 and the New York Convention. Applications require submission of the original or a certified copy of the award, the arbitration agreement, and certified translations if not in Turkish. Turkish courts may refuse enforcement if the award conflicts with Turkish public policy or addresses non-arbitrable matters.
What is the estimated timeframe for the recognition and enforcement of an award? May a party bring a motion for the recognition and enforcement of an award on an ex parte basis?
Recognition and enforcement proceedings in Turkish courts generally take 12 to 18 months, depending on the complexity and workload of the court. Appeals can add 6 to 12 months to the process. Ex parte applications are not typically allowed, as parties must be notified and given a chance to respond, ensuring a fair hearing.
Does the arbitration law of your country provide a different standard of review for recognition and enforcement of a foreign award compared with a domestic award?
Foreign arbitral awards are reviewed under the New York Convention or IPPL provisions. Domestic awards, however, do not require separate recognition and enforcement proceedings. Domestic awards can only be challenged through setting aside proceedings under TIAL and TCCP, limited to grounds like party incapacity, procedural irregularities, or public policy conflicts.
Does the law impose limits on the available remedies? Are some remedies not enforceable by the local courts?
Both TIAL and TCCP set specific time limits for initiating setting-aside proceedings before the regional court of justice. Article 15 of TIAL provides a 30-day period after notification of the award for filing a setting-aside case. In domestic cases, Article 439 of TCCP sets a one-month limit. Setting-aside proceedings under TIAL suspend the execution of awards, while TCCP requires a security deposit to suspend execution.
Can arbitration awards be appealed or challenged in local courts? What are the grounds and procedure?
Arbitral awards under TIAL and TCCP can only be challenged through setting-aside proceedings in the regional court of justice. Grounds for setting aside include party incapacity, procedural errors, jurisdictional overreach, decisions on non-arbitrable disputes, and public policy conflicts. Decisions by the regional court may be appealed, but the appeal review is limited to the grounds for setting aside.
Can the parties waive any rights of appeal or challenge to an award by agreement before the dispute arises (such as in the arbitration clause)?
Article 15 of TIAL allows parties to partially or fully waive their right to initiate a setting-aside action. If a party is domiciled outside Türkiye, it may fully renounce this right in the arbitration agreement or in writing after concluding the arbitration agreement. Parties may also waive specific grounds for setting-aside actions.
In what instances can third parties or non-signatories be bound by an award? To what extent might a third party challenge the recognition of an award?
Third parties or non-signatories are bound by an award only if they joined the arbitration with the parties’ and tribunal’s agreement. A third party bound by an award may challenge its recognition and enforcement based on specific conditions addressed in related questions.
Have there been any recent court decisions in your jurisdiction considering third party funding in connection with arbitration proceedings?
Türkiye has no specific legal regulations permitting or prohibiting third-party funding in arbitration. Additionally, there are no Turkish court decisions addressing third-party funding in this context.
Is emergency arbitrator relief available in your country? Are decisions made by emergency arbitrators readily enforceable?
Although TIAL and TCCP do not regulate emergency arbitrator relief, some arbitration institutions in Türkiye, such as ISTAC and ITOTAM, offer emergency arbitrator provisions. ISTAC’s Emergency Arbitrator Rules allow interim measures if deemed appropriate by the emergency arbitrator. The measures are binding, and parties may seek local court assistance for enforcement if a party fails to comply.
Are there arbitral laws or arbitration institutional rules in your country providing for simplified or expedited procedures for claims under a certain value? Are they often used?
TIAL and TCCP do not include simplified or expedited procedures, but arbitration institutions such as ISTAC and ITOTAM have rules for expedited proceedings. For example, ISTAC applies fast-track arbitration rules if the dispute amount is under 5 million Turkish Lira (approximately 145,000 USD), while ITOTAM’s threshold is 2 million Turkish Lira (around 58,445 USD).
Is diversity in the choice of arbitrators and counsel (e.g., gender, age, origin) actively promoted in your country? If so, how?
The Turkish legal and arbitration community increasingly emphasizes diversity in arbitration panels, promoting gender, ethnicity, age, and professional background diversity. ISTAC, ITOTAM, and EDAC, along with international initiatives like the Equal Representation in Arbitration Pledge, support broader diversity representation.
Have there been any recent court decisions in your country considering the setting aside of an award that has been enforced in another jurisdiction or vice versa?
Under the New York Convention and IPPL, Turkish courts cannot enforce awards set aside in the arbitration’s jurisdiction. However, awards enforced in other jurisdictions may be accepted or dismissed based on conditions in the New York Convention or IPPL. Recent rulings confirm these principles, such as an April 2022 Court of Cassation decision establishing requirements for enforceability in Türkiye.
Have there been any recent court decisions in your country considering the issue of corruption? What standard do local courts apply for proving of corruption? Which party bears the burden of proving corruption?
Corruption allegations must be proven by the party asserting them. The burden of proof lies with the claimant. There are currently no known Turkish court decisions addressing corruption in relation to international or domestic arbitration proceedings.
What measures, if any, have arbitral institutions in your country taken in response to the COVID-19 pandemic?
Turkish arbitral institutions, like many around the world, adapted to the COVID-19 pandemic by enabling virtual or remote hearings through videoconferencing tools. These institutions updated their rules to facilitate online dispute resolution, prioritizing cybersecurity and data protection. ISTAC, for instance, promoted online dispute resolution and updated its rules in April 2020 to support remote arbitration processes.
Have arbitral institutions in your country implemented reforms towards greater use of technology and a more cost-effective conduct of arbitrations? Have there been any recent developments regarding virtual hearings?
Following the pandemic, virtual or remote hearings have continued due to their cost-efficiency and convenience. Arbitration institutions in Türkiye, like ISTAC, have embraced online case management systems, digital evidence presentation, and streamlined communication, making arbitration more accessible and efficient, particularly in complex cases.
Have there been any recent developments in your jurisdiction with regard to disputes on climate change and/or human rights?
Türkiye has increasingly adopted digitalization, virtual hearings, and eco-friendly practices in arbitration, aligning with global trends towards greener arbitration. While there is no specific regulatory framework for green arbitration, Turkish arbitration practices reflect growing environmental awareness, with an emphasis on paperless processes and digital solutions.
Do the courts in your jurisdiction consider international economic sanctions as part of their international public policy? Have there been any recent decisions in your country considering the impact of sanctions on international arbitration proceedings?
Turkish courts consider international public policy in enforcing foreign court and arbitral awards, especially if such awards are contrary to Turkish public policy. Although there are no notable cases specifically addressing sanctions in arbitration, there is an increasing awareness of international sanctions’ impact on dispute resolution in Türkiye.
Has your country implemented any rules or regulations regarding the use of artificial intelligence, generative artificial intelligence or large language models in the context of international arbitration?
Türkiye has not yet implemented specific rules regarding artificial intelligence in arbitration. However, the adoption of technology for document analysis, legal research, and case management is on the rise, reflecting a global trend towards enhancing arbitration efficiency with legal tech tools.
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