Arbitration in Turkey - We Can Solve Your Problems

Arbitration in Turkey

Updated on Monday 21st November 2022

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arbitration in turkey vechi.jpgSince the International Arbitration Law came into force in 2001, arbitration has become a popular procedure in Turkey, especially for foreigners involved. This procedure is generally used to solve international disputes in different fields of activity, such as commercial and construction. Arbitration can be performed both for intern and international disputes, involving a part (company) from Turkey.
The intern disputes are solved according to the Code on Civil Procedure and the international disputes are conducted based on Turkish International Arbitration Law. Regarding international arbitration, Turkey is a part of the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1965) and of the Geneva Convention on International Commercial Arbitration (1961). Our Turkish lawyers can provide legal guidance for those interested in arbitration in Turkey.

Who is in charge of international arbitration?

In Turkey, there are a few organizations that apply the international arbitration procedures:
  • The Turkish Union of Chambers and Commodity Exchanges.
  • The Istanbul Chamber of Commerce.
  • Ankara Chamber of Commerce Arbitration Institution.
  • Izmir Chamber of Commerce Arbitration Institution.
There are many arbitrators who can perform the arbitration procedures in Turkey. The first two organizations are in charge of solving major international disputes, mentioning that in Turkey there are no specialized courts for international arbitration, but the courts in the main cities are aware of the arbitration procedures and the legislation related to these. More on this topic can be discussed with our Turkish lawyers. They can also help foreigners buy a property in Turkey.
Are you planning to relocate to Turkey? You must also apply for a residence permit in Turkey. Thus, specialized legal advice can be offered by our Turkish lawyers with experience in this field. You will need to present a valid passport, as well as proof that you have health insurance. You must also present the rental or ownership contract of a house, to prove the domicile in Turkey.

Commercial arbitration in Turkey

International disputes in the maritime or construction sector can be resolved with commercial arbitration in Turkey. Also, this procedure is used in case of commercial disputes between varied companies implicated in conflicts such as non-compliance with contractual terms, for example.
Respecting the Law on Istanbul Arbitration Center of 2015, disputes can be resolved quite easily with the help of arbitration in Turkey. Here is what it means to resolve an arbitration dispute in Turkey:
  1. The arbitration procedure will be explained to the parties involved, who must agree on this type of settlement.
  2. An arbitrator may be chosen, but the parties involved in the arbitration must agree on this issue.
  3. A discussion follows in which the complaints of the parties involved are verified.
  4. The arbitrator may propose various methods of settlement, and the parties may express their agreement or disagreement.
  5. An arbitration process takes place in complete confidentiality, therefore, the information cannot be publicly displayed.
  6. The final decision applies as soon as the parties accept it.
Arbitration in Turkey is often the right option for resolving disputes in exchange for presenting the case to the court of law. If you would like more information in this regard, please get in touch with our team of lawyers in Turkey.

Arbitration hearing in Turkey

Depending on the severity of the dispute between the parties, the arbitration hearing may take place only once or several times. If the solutions cannot be offered at the first meeting, the statements of the witnesses (if they exist) and even the expertise performed by specialists in the respective field may intervene. It is then up to the arbitration court to produce the award with the decision to settle the respective dispute.

How quickly can a dispute be solved through arbitration in Turkey?

Compared to the dispute resolution procedure in court, the arbitration method is much faster. The parties meet in front of an arbitrator, and here decisions can be made regarding the resolution of conflicting issues, without asking for time for other verifications or procedures. However, if the problems cannot be solved in a few days, there is the possibility that the final decision to be offered in a few months. In addition, this procedure is not as expensive as the one that takes place in the court of law in Turkey.

What is an arbitration agreement in Turkey?

An arbitration agreement in Turkey is the type of document that contains the terms and conditions for resolving a dispute between two companies, individuals, or legal entities. Regardless of the disputes presented, they can have a quick and beneficial solution for both parties involved. An arbitration agreement in Turkey contains all the details of the conflict and the mutually agreed solutions, the legislation in force, the name of the person developing the procedure, and the costs involved.
If you want to know more about arbitration agreements in Turkey, we invite you to talk to our lawyers in Turkey. We can help you in the field of business, both in terms of resolving commercial disputes and setting up a company in Turkey.

Appealing the award - What happens next?

If procedural errors are discovered in the mediation of a dispute through arbitration in Turkey, one of the parties may be entitled to appeal the award. However, until this point is reached, the arbitration agreement will be analyzed, which must mention the terms and conditions under which the award can be challenged or appealed. An experienced lawyer can tell you all the details about this subject, so do not hesitate to talk to us.

Arbitration vs. litigation

Arbitration is preferred for international disputes and less for intern issues, especially if there are involved large amounts. It is not a cheap solution and it is generally chosen by large companies that can afford to pay an important cost for solving their legal issues. Unlike litigation, arbitration is preferred by international companies because it is a fast procedure and the arbitrators are specialized in the field activity of the companies involved. The parties can also choose the language they will use for the arbitration. For litigation, you can’t choose the judges, but if you prefer the arbitration, you have the possibility to select the arbitrator, according to the Turkish International Arbitration Law.

Making investments in Turkey - A safe destination

Turkey is a business destination highly sought after by foreign investors due to its tender and stable business climate. The advantageous costs for setting up a business, the experienced labor force, the developed infrastructure, and the economic stability are other aspects that any foreign entrepreneur takes into account when choosing Turkey for investments. Here are other interesting statistics about Turkey's economy:
  • The total FDI for Turkey in 2020 was about USD 212 billion.
  • The 2020 Doing Business report ranked Turkey 33rd out of 190 world economies in terms of climate and optimal business conditions.
  • In 2020, over 33% of total foreign investment in Turkey was absorbed by the manufacturing sector.
  • There are over 2,900 foreign companies in Turkey.
If you need more details about the international arbitration procedures in Turkey, you can contact our local Turkish lawyers.