International arbitration law and rules in Turkey

The Istanbul Arbitration Centre (ISTAC) was one of the first centres in the world to respond to the difficulties in conducting hearings in the context of the COVID 19 pandemic by regulating the principles and procedure of online hearings in arbitration proceedings; its fast-track arbitration procedure is very much in demand in Turkiye for small commercial disputes.

1.1.1 Arbitration was known and applied in Turkiye even before the foundation of the Republic of Turkiye in 1923, with the very first codes of the new-born Republic being modelled on the laws of civil law countries such as Switzerland, and containing provisions relating to arbitration proceedings in Turkiye. These codes have since been amended based on the UNCITRAL Model Law (1985).

1.2.1 Turkiye has a geographical advantage as a neutral seat of arbitration, especially for disputes arising from agreements concluded between parties from Asia and Europe. 

1.2.2 Awareness of arbitration has risen significantly in Turkiye in recent years. The Istanbul Arbitration Centre (ISTAC) is in particular worthy of praise in this regard. ISTAC was established as an impartial arbitration institution in 2015 as part of a wider project of the Istanbul Finance Centre. 

1.2.3 ISTAC Arbitration Rules came into effect in October 2015, when ISTAC became fully operational to serve its clients in Turkish, English, French and German languages. Since then, it has been reported that ISTAC Arbitration Rules have been inserted into arbitration agreements relating to several high-profile projects in Turkiye. In addition, The Prime Ministry of the Republic of Turkiye has also published a circular encouraging public entities to use ISTAC Arbitration Rules as a dispute settlement mechanism for both local and international agreements. 1 Circular of the Prime Ministry No. 2016/25, published in the Official Gazette of the Republic of Turkiye, 19 November 2016, (29893). Consequently, it is expected that the number of disputes which are referred to arbitration in Turkiye will grow significantly in the near future.

2.1.1 Turkish law regulates proceedings for international arbitration, domestic arbitration and the enforcement of foreign arbitral awards in Turkiye in separate pieces of legislation. 

2.1.2 The Code on International Arbitration No. 4686 (International Arbitration Code) came into effect in 2001 and was based on the UNCITRAL Model Law (1985). The International Arbitration Code constitutes the main source for international arbitration proceedings in Turkiye and, in this chapter, we will elaborate on its provisions and principles. 

2.1.3 Although the International Arbitration Code is only applicable to “international” arbitrations, the existence of a “foreign element” is sufficient to make an arbitration “international”. According to the International Arbitration Code, a foreign element is deemed to exist, where:

• the domiciles, habitual residences or places of business of the parties to the arbitration agreement are located in: 
  • different countries to each other;
  • a different country to the seat of arbitration; or
  • a different country to the place where the substantial part of the obligations under the main agreement is to be performed, or the place with which the subject matter of the dispute is most closely connected;
• at least one of the shareholders of the company that is a party to the main agreement containing the arbitration clause has brought foreign capital into Turkiye (according to the applicable foreign investment incentive legislation); 
• a loan or a guarantee agreement needs to be executed in order to bring foreign investment to Turkiye for the performance of the main agreement; or
• the main agreement or legal relationship constituting the basis of the arbitration agreement provides a flow of capital or goods from one country to another. 2 International Arbitration Code, art 2.  

2.1.4 Apart from the need for a foreign element, another condition for the application of the International Arbitration Code is that Turkiye should be determined as the seat of arbitration. However, even in cases where the seat of arbitration is determined to be in another country, the parties or the arbitral tribunal may decide on the application of the International Arbitration Code, if the dispute in question has a foreign element.

2.1.5 In contrast, the Turkish Code of Civil Procedural Law No. 6100 (Civil Procedural Code), which came into effect in 2011, deals purely with domestic arbitrations which do not contain a foreign element and, therefore, do not fall within the scope of the International Arbitration Code. 

2.1.6 In addition, the New York Convention is the main source which applies when it comes to the recognition and enforcement of foreign awards in Turkiye. However, the recognition and enforcement of foreign awards which do not fall within the scope of the New York Convention are regulated instead under the Code on International Private and Procedural Law No. 5718 (International Private and Procedural Code), which came into force in 2007. 

2.2.1 Turkish arbitration legislation is founded on the following principles:

• the equality of the parties and due process;
• party autonomy; and
• impartiality and independence of the arbitrators. 

3.1.1 Under Turkish law, an arbitration agreement is an agreement concluded between the parties to submit to arbitration all or certain disputes which have arisen, or which may arise between them in respect of a defined legal relationship, whether this be contractual or not. The agreement may be executed in the form of a separate agreement or in the form of a clause included in another agreement. 3 International Arbitration Code, art 4.  

3.1.2 The Turkish Supreme Court of Appeal has accepted as a matter of principle that an arbitration agreement cannot be extended to non-signatories. 4 Turkish Supreme Court of Appeals, 11th Civil Chamber, decision no. 2014/9538 E. and 2015/8707 K., 25 June 2015.

3.2.1 The arbitration agreement must be in writing. 5 International Arbitration Code, art 4.  An agreement in this context is concluded in writing if it is contained in a document signed by the parties or in an exchange of letters, telex, telegrams, or other means of telecommunication, which provide a record of the agreement. 

3.2.2 If a party refers to an arbitration agreement in court (ie challenges the court’s jurisdiction due to the presence of an arbitration agreement) and the respondent does not object to this in due course, this is also construed as a validly concluded arbitration agreement between the respective parties.

3.2.3 Under Turkish law, an arbitration agreement may also be validly concluded by a party’s representative rather than the authorised bodies of a legal entity (for example the board of directors), provided that the representative holds a power of attorney in which his/her empowerment to conclude an arbitration agreement is explicitly set out. 

3.3.1 The general principle is that matters which can be freely governed by the parties’ mutual agreement and thus considered to be subject to the parties’ will alone, can be settled through arbitration. 

3.3.2 However, according to the International Arbitration Code, disputes dealing with rights in rem in real property located in Turkiye cannot be subject to arbitration. 6 ibid, art 1.  Furthermore, although this is not set out explicitly in the legislation, there have been some precedents of the Turkish Supreme Court of Appeal in which disputes arising from eviction and the fixing of lease fees for real property have been deemed to be non-arbitrable.

3.3.3 In addition, disputes arising from family law and competition law are also not arbitrable as the settlement of these matters pertains to public order. 

3.3.4 As to administrative disputes, the main rule is that they are within the jurisdiction of the Administrative Courts and also cannot be subject to arbitration. However, it is possible for disputes arising from concession agreements related to administrative services to be submitted to arbitration. 7 The Code on the Principles of Arbitration for Concession Agreements, No. 4501.   

3.3.5 In principle, disputes arising from agreements relating to intellectual property rights can be subject to arbitration, but the award can only be binding on the parties to the arbitration agreement. However, it is debatable whether intellectual property rights can be subject to arbitration in a way that affects the registration status of the relevant intellectual property right, as the national authorities have jurisdiction over these issues.   

3.3.6 The arbitrability of disputes in connection with consumer protection law and employment law is discussed at section 11 below.

3.4.1 Turkish law follows the doctrine of separability. It provides that an arbitration clause that forms part of a contract shall be treated as an autonomous agreement, and the invalidity of the underlying agreement shall not affect the validity of the arbitration agreement. 8 International Arbitration Code, art 4   

3.5.1 A binding arbitration agreement establishes the arbitral tribunal’s jurisdiction. 

3.5.2 However, if one party brings the dispute before a state court, the court will not ex officio examine whether the respective dispute should have been referred to arbitration, as the other party will need to raise a jurisdiction objection within the scope of the preliminary objection provisions of the Civil Procedural Code. If the court decides that the arbitration agreement is valid, the case will then be dismissed on procedural grounds. 9 ibid, art 5.  

4.1.1 The parties are free to determine the number of arbitrators that will constitute the arbitral tribunal. In the absence of such a determination the arbitral tribunal will be composed of three arbitrators. In any event, the number of arbitrators must be an odd number. Legal entities cannot be appointed as arbitrators. 10 ibid, art 7.  

4.1.2 If there is to be a sole arbitrator and the parties fail to agree on the appointment of a candidate, upon the request of one of the parties, the sole arbitrator will be appointed by the civil court of first instance. 11 Ibid , art 7.  

4.1.3 If there are to be three arbitrators, each party appoints one arbitrator and the party-appointed arbitrators choose a third arbitrator to act as the chairman. If one of the parties fails to appoint its arbitrator within 30 days of the request of the other party, or the appointed arbitrators fail to appoint the third arbitrator upon the request of one of the parties, the civil court of first instance will appoint the arbitrator. 12 ibid, art 7.   

4.1.4 Even if the parties agree on the procedure to appoint the arbitrators, the appointment of the arbitrator or the arbitral tribunal will be made by the civil court of first instance upon the request of one of the parties, if: 

• a party does not comply with the agreed procedure; 
• under the agreed procedure, the parties or the party-appointed arbitrators are required to decide together, but they are unable to reach agreement; or
• a third party (including an institution) which was authorised to appoint the arbitrator or the arbitral tribunal does not perform such a duty. 

In such cases, the decision of the civil court for the appointment of the arbitrators will be final and binding. 13 ibid, art 7.  

4.2.1 An arbitrator may be challenged if:

• they do not possess the qualifications that were agreed to by the parties;
• a reason exists for a challenge to be made in accordance with the arbitration procedure agreed by the parties; or
• the existing circumstances give rise to justifiable doubts as to their impartiality or independence. 14 ibid, art 7.  

4.2.2 The parties are free to decide on the procedural rules for challenging arbitrators. However, the main rule is that the challenging party must submit its written statement within 30 days of either the appointment of the arbitrator or the tribunal, or when they become aware of any circumstance that may give rise to such a challenge. An unsuccessful challenge may also be taken to court within 30 days after notice of the decision of the arbitral tribunal. A challenge to the sole appointed arbitrator, or to all members of the arbitral tribunal, or a challenge to arbitrators that may remove the decision-making majority of the tribunal, can only be made to the civil court of first instance. The court’s decision on these issues is final. 15 ibid, art 7.

4.2.3 If the mandate of an arbitrator terminates, a substitute arbitrator must be appointed in accordance with the rules applicable to the original appointment. 16 ibid, art 7.  However, if the names of the arbitrators were determined beforehand in an arbitration agreement, and the court has decided to terminate the mandate of the sole arbitrator, or the members of the tribunal who constitute the decision-making quorum of the tribunal, the arbitral proceedings will end. In such a case, the parties in dispute may either submit their case to the competent court or agree to submit their case to arbitration by concluding a new arbitration agreement.

4.3.1 Arbitrators must be impartial and independent and are obliged to disclose any circumstances likely to give rise to justifiable doubts as to their impartiality or independence prior to their appointment. Arbitrators must also disclose any circumstances that may affect their impartiality or independence that arise after the commencement of the arbitration. 17 ibid, art 7.  

4.3.2 Each party must have a full opportunity to assert its claim or defence. 18 ibid, art 8.  The arbitrators must also comply with the parties’ procedural agreement and render an enforceable award within the applicable time limits. 19 ibid, art 15.   

4.4.1 Parties may determine the arbitrators’ fees in the arbitration agreement or refer to the established international rules or institutional arbitration rules for this purpose. If there is no such agreement or reference made, the fees of the arbitrators are determined between the arbitral tribunal and the parties by taking into consideration the amount in dispute, the nature of the dispute and the term of arbitral proceedings. If the parties and the arbitral tribunal cannot agree on the determination of the fees, the fees are made in accordance with the schedule of fees determined annually by the Ministry of Justice. 20 ibid, art 16.  

4.4.2 The arbitral tribunal may request that the claimant deposits money in advance for the arbitration costs which are explained in detail in paragraph 7.4. If such a payment is not made within the period determined by an arbitral decision, the arbitral tribunal may suspend the proceedings. If payment is made within 30 days from notification to the parties of such a suspension, the arbitral proceedings will continue; otherwise, the arbitration will come to an end. 21 ibid, art 16.  

4.5.1 Unless otherwise agreed between the parties, an arbitrator who accepts their office, is responsible for providing an indemnity for any damages that may arise from an unjustifiable failure of the arbitrator to perform their duties. 22 ibid, art 7.  

5.1.1 When a dispute is brought before an arbitral tribunal, the kompetenz-kompetenz principle applies, and the tribunal will decide on its own jurisdiction. This also encompasses any objections with respect to the existence or validity of the arbitration agreement. 23 ibid, art 7.  

5.1.2 Any objection to the jurisdiction of the arbitral tribunal must be raised, at the latest, with the submission of the statement of defence. However, any objection that the arbitral tribunal has or is exceeding its authority must be raised immediately. 24 ibid, art 7.  

5.1.3 Such objections are examined by the arbitral tribunal as a preliminary question. If the arbitral tribunal deems itself competent, then the parties will be able to proceed with the arbitration proceedings. 25 ibid, art 7.  

5.2.1 Unless otherwise agreed between the parties, the arbitral tribunal may, at the request of a party, order an interim measure during the arbitral proceedings. In addition, the arbitral tribunal may, at its discretion, demand an appropriate guarantee or security from the requesting party in order to issue the interim measure. 26 ibid, art 6.  

5.2.2 However, the arbitral tribunal will not grant interim measures that:

• are required to be enforced through execution offices, which are state authorities that have a legal power to request the fulfilment of debt and/or obligation and use coercive means; or other official authorities; or 
• bind third parties. 27 ibid, art 6  

5.2.3 If a party does not comply with the interim measure rendered by the arbitral tribunal, the other party may request the assistance of a competent court to enforce it. 28 ibid  

5.2.4 A party’s right to claim interim measures pursuant to the provisions of the Civil Procedural Code and the Execution and Bankruptcy Code no. 2004 remains reserved. 29 ibid  In this regard, such a party is also entitled to submit a claim for interim measures to the competent court.

6.1.1 Unless otherwise agreed between the parties, an arbitration is deemed to have commenced on whichever is applicable of the following days:

• the day on which an application is made to the civil court of first instance or to the relevant person or institution (if they are authorised to appoint arbitrators according to the parties’ agreement);
• upon the appointment of the arbitrator (if the arbitrators are to be appointed mutually by the parties according to their agreement) 30 The claimant notifies the other party with respect to such an appointment by requesting from the other party agreement to the appointment of an arbitrator. ; or
• the day on which the respondent receives the request for arbitration (if the arbitration agreement already sets out the name of the sole arbitrator or the names of the members of the arbitral tribunal). 31 International Arbitration Code, art 10.   

6.2.1 Parties are free to agree on the procedure to be followed by the arbitral tribunal and, in this respect, may refer to any law or international or institutional arbitration rules. In the absence of such agreement, the tribunal will conduct the proceedings in accordance with the provisions of the International Arbitration Code. 32 ibid, art 8.

6.3.1 The seat of the arbitration is determined by the parties or by the arbitral institution agreed upon by the parties. 33 ibid, art 9.  In the absence of an agreement as to the seat of arbitration, the arbitral tribunal determines the seat of arbitration according to the circumstances of the case at hand. 34 ibid, art 10.  

6.3.2 The parties may also agree on the language of the arbitral proceedings. However, this language must be one of the official languages recognised by the Republic of Turkiye.

6.4.1 The arbitral tribunal decides whether to hold oral hearings for the presentation of evidence or argument, or whether the proceedings are to be conducted on the basis of documents only. However, unless the parties have agreed that no oral hearings are to be held, the arbitral tribunal will hold hearings at an appropriate stage in the proceedings, if so requested by a party. 35 ibid, art 11.

6.4.2 The arbitral tribunal must give sufficient prior notice to the parties about the date of any on-site inspection, examination by an expert, or any hearing or meeting of the arbitral tribunal for the purposes of examining evidence. The tribunal must also set out the consequences of any failure to attend an inspection, examination, hearing or meeting. 36 ibid  

6.4.3 All statements, documents or other information supplied to the arbitral tribunal by one party must be disclosed to the other party. 37 ibid  

6.5.1 Where a party to an arbitration loses its capacity to be a party to the arbitration, the arbitral tribunal suspends the arbitral proceedings and notifies the relevant parties of the suspension. 38 ibid  

6.5.2 The arbitral proceedings end if, within six months, the relevant party does not respond or does not explicitly notify the other party or the arbitral tribunal of its intention to continue with the proceedings. 39 ibid  

6.5.3 If a party defaults in participating in the arbitration proceedings, the following provisions are applicable:

• if the claimant fails to communicate its statement of claim in the prescribed time period, the arbitral tribunal terminates the proceedings;
• if the statement of claim lacks the legally prescribed elements of a statement of claim and the incompleteness is not remedied within a period determined by the arbitral tribunal, the tribunal terminates the proceedings;
• if the respondent fails to communicate its statement of defence, the arbitral tribunal continues the proceedings without treating such a failure, in itself, as an admission of the claimant's allegations; and
• if any party fails to attend a hearing or to produce evidence, the arbitral tribunal may continue the proceedings and may make an award based on the evidence available to it. 40 ibid  

6.6.1 The arbitral tribunal may: 

• appoint one or more experts to report to it on specific issues to be determined by the arbitral tribunal; 
• require a party to give an expert any relevant information or to produce or to provide access to any relevant information or documents; or
• rule on an on-site inspection regarding the arbitral proceedings. 41 ibid, art 12.  

6.6.2 Unless otherwise agreed between the parties, the expert will attend a hearing after the delivery of their written or oral report, if a party so requests or if the arbitral tribunal considers it necessary. At this hearing, the parties are entitled to question the expert and to present their own expert witnesses to testify on the points at issue. 42 ibid

6.7.1 The International Arbitration Code does not provide for a duty of confidentiality. Hence, it is for the parties to agree on the desired level of confidentiality in the proceedings. Such agreement can be implicit or explicit. In order to avoid uncertainty at a later stage, the parties should expressly agree that the arbitral proceedings and the award are to be confidential, either by including such a provision in their arbitration agreement or by referring to institutional rules which include provisions on confidentiality.

6.7.2 The ISTAC Arbitration Rules expressly provide that the arbitral proceedings are confidential, but the parties can agree otherwise. Under these rules, upon the request of a party, the sole arbitrator or arbitral tribunal is entitled to make any order concerning the confidentiality of the arbitration and the proceedings, and to take necessary measures to protect trade secrets, along with other confidential information. 43 ISTAC Arbitration Rules, art 21.  

6.8.1 The arbitral tribunal may request assistance from the competent court of first instance in taking evidence, with the court of first instance collecting evidence according to the Civil Procedural Code. 44 International Arbitration Code, art 12.  

7.1.1 Parties to an international arbitration are free to decide on the applicable law, with the arbitral tribunal deciding on the merits of the dispute based upon the applicable law as agreed by the parties. Commercial customs and practices will also be taken into account in construing the provisions of the underlying contract and for filling in gaps. Unless otherwise agreed by the parties, the conflict of law rules and the procedural rules of the relevant law will not apply. 45 ibid  

7.1.2 If there is no agreement between the parties on the applicable substantive law, the arbitral tribunal will apply the law that has the closest connection with the dispute. 46 ibid  

7.2.1 The International Arbitration Code provides that, unless otherwise agreed by the parties, an arbitral award must be rendered within one year of (a), in the case of a sole arbitrator, the date of their appointment or (b), in any other case, the date when the minutes of the tribunal’s first meeting are written. However, the parties may agree to extend the term of the arbitration. If there is no such agreement during the proceedings, the competent court can also extend the relevant term upon the request of a party, such a decision being final. 47 ibid, art 10.   

7.2.2 Unless otherwise agreed by the parties, any decisions of the arbitral tribunal must be made by a majority of its members. 48 ibid, art 13.

7.2.3 Unless otherwise agreed by the parties, the sole arbitrator or the arbitral tribunal may render partial awards. 49 ibid, art 14.  

7.2.4 An arbitral award must contain:

• the names, surnames, titles and addresses of the parties, their representatives and lawyers; 
• the reasons upon which the award is based along with their legal basis, and, if there is a request for compensation, the amount of compensation; 
• the seat of arbitration and the date of the award; 
• the names, signatures and dissenting opinions, if any, of the arbitral tribunal; and
• an indication that an action for setting aside the award could be brought. 50 ibid      

7.3.1 The parties may conclude a settlement during the arbitral proceedings, in which case the arbitral tribunal, if requested by the parties, may record such settlement in the form of an arbitral award. 51 ibid

7.4.1 An award must take into account the expenses of the arbitration. 52 ibid, art 16.  However, under Turkish law, costs incurred by parties themselves, other than legal expenses provided under the International Arbitration Code (on which see below), are normally borne by the parties themselves.

7.4.2 Unless otherwise agreed by the parties, the costs of the arbitration are borne by the unsuccessful party. 53 ibid, art 16. If both parties’ claims are partially upheld in the arbitral award, the costs of the arbitration are apportioned among the parties.  

7.4.3 The arbitral tribunal is required to state the costs of arbitration in its arbitral award. The term “costs” refers to: 54 ibid  

• the fees of the arbitrators; 
• the arbitrators’ travel and other expenses; 
• fees paid to experts, and to other persons whose assistance is sought and who are collectively appointed by the arbitral tribunal;
• costs for an on-site inspection; 
• witnesses’ travel and other expenses, to the extent approved by the arbitral tribunal; 
• if the parties are represented by an attorney at law, the successful party’s attorney fees, which are calculated by taking into account the minimum fee schedule that is determined annually by the Presidency of the Union of Turkish Bar Associations stipulating the minimum fee that the attorneys would be entitled to for providing legal services, subject to the arbitral tribunal’s approval; 
• charges for applications to the courts in accordance with the provisions of the International Arbitration Code; and
• notification expenses with respect to the arbitral proceedings. 55 ibid, art 13.  

7.4.4 There is no provision in the International Arbitration Code that precludes the arbitral tribunal from awarding interest; hence, provided that a claim for interest has been made, as per the applicable law, the arbitral tribunal is entitled to award interest at its own discretion. 

7.5.1 The arbitral proceedings are terminated with the issuance of the final award or with the occurrence of any of the following circumstances: 

• if the claimant withdraws its claim, unless the respondent objects to that and the arbitral tribunal recognises a legitimate interest on the respondent’s part in obtaining a final determination of the dispute; 
• if the parties agree to the termination of the proceedings; 
• if the arbitral tribunal finds that the continuation of proceedings has become unnecessary or impossible for other reasons; 
• if a request for the extension of the arbitral term is dismissed by the competent court; 
• if, in cases where the parties agree that the arbitral tribunal has to render its decision with unanimity, the tribunal cannot reach unanimity; 
• if, in cases where the arbitration is stayed due to loss of capacity by a party to the arbitration, the arbitration proceedings cannot be continued due to that loss of capacity; and
• if no advance payment for fees and expenses was made, contrary to the arbitral tribunal’s specific instructions.   

7.5.2 The mandate of the arbitral tribunal ends with the termination of the arbitral proceedings. However, the authority of the tribunal to correct and clarify the award and to issue a supplemental award remains reserved. 56 ibid

7.6.1 Unless an application is made to set aside the award, or if such an application is made and dismissed by the competent court, any party may acquire a document from the court indicating that the award rendered is final and binding. 57 ibid, art 15.  This applies to arbitrations which are subject to the International Arbitration Code. 

7.6.2 As discussed in section 10.2 below, the enforcement of foreign awards is subject to either the New York Convention or the International Private and Procedural Code. 

7.7.1 Within 30 days of receipt of the award, a party may request that the sole arbitrator or arbitral tribunal: 

• correct any material errors in computation, any clerical or typographical errors or any errors of a similar nature; or
•  provide an interpretation of a specific point or part or whole of the award. 58 ibid, art 14.  

The other party must also be notified of such a request.

7.7.2 If the arbitral tribunal considers that, following the receipt of the other party’s opinion, the request is justified, it may make the correction of the material error or give the interpretation within 30 days of receipt of the request. 59 ibid  

7.7.3 The arbitral tribunal may also correct any material error on its own initiative within 30 days of the date of the award. 60 ibid  

7.7.4 A party may, within 30 days of receipt of the award, request that the arbitral tribunal make an additional award in respect of the claims presented in the arbitral proceedings but omitted from the award. Such request must be notified to the other party. If the arbitral tribunal considers the request to be justified, it must make the additional award within a further 60 days. 61 ibid  

7.7.5 A decision concerning the correction or interpretation of the award or an additional award is notified to the parties and forms part of the award. 62 ibid  

8.1.1 Except where the International Arbitration Code so provides, the courts are required to refrain from intervening in international arbitration matters. 63 ibid, art 3.   

8.1.2 The civil court of first instance has jurisdiction over the matters permitted by the International Arbitration Code. Specifically, such jurisdiction is allocated to the courts having jurisdiction over the places where the defendant has its domicile, habitual residence or places of business.  If none of these places is located in Turkiye, the Istanbul Civil Court of First Instance will have the jurisdiction. 64 ibid    

8.2.1 If the parties to a pending court case agree to refer the dispute in question to arbitration, the relevant court must stay the court proceedings and send the case file to the relevant arbitrator or arbitral tribunal. 65 ibid, art 5.   

8.3.1 If a court case is initiated regarding a dispute which is the subject of an arbitration agreement, the counterparty may raise an objection with the court on the ground that the parties had agreed to submit the dispute to arbitration. 66 ibid  Any objection to the jurisdiction of the court must be raised at the very latest by the submission of the answer to the petition. 67 ibid, art 116.  Such a question is examined by the relevant court as a preliminary question. If the objection is accepted, the court will dismiss the case on procedural grounds. 68 ibid, art 5.  

8.4.1 A party to the arbitration agreement may request that the court impose an interim injunction or interim attachment prior to, or during, the arbitral proceedings. 69 ibid, art 6.  

8.4.2 As discussed in section 5.2 above, the arbitral tribunal may also grant an interim measure or an interim attachment during arbitral proceedings, and, if one of the parties does not comply with the respective interim measure or interim attachment of the tribunal, the other party may request that the court issue an interim measure or interim attachment for this purpose. 70 ibid  

8.5.1 The arbitrator or arbitral tribunal may seek the assistance of the court of first instance to collect evidence. In such a case, the Civil Procedural Code is applicable. 71 ibid, art 12.

9.1.1 Recourse against an award that was issued by an arbitral tribunal seated in Turkiye may only be made by an application to set aside the award.

9.1.2 The International Arbitration Code provides that the Regional Courts of Appeals are the courts authorised to hear applications to set aside an award. 72 ibid, art 15.  Specifically, jurisdiction is allocated to the courts having jurisdiction over the places where the defendant has its domicile, habitual residence or places of business. 73 ibid  If none of these places is located in Turkiye, the Istanbul Regional Courts of Appeals have jurisdiction. 74 ibid, art 3.     

9.1.3 The International Arbitration Code provides an exhaustive list of the grounds for setting aside awards. The list reflects the grounds set out in Article 36 of the UNCITRAL Model Law (1985) and Article V of the New York Convention.

9.1.4 Pursuant to the International Arbitration Code, an arbitral award may be set aside if:

• a party to the arbitration agreement did not have the capacity to conclude an arbitration agreement;
• the arbitration agreement is invalid under the law to which the parties have subjected it or, in the absence of such a choice, under Turkish law;
• the arbitrator or the arbitral tribunal was not appointed in accordance with the procedure agreed between the parties, or in accordance with the procedures set out in the International Arbitration Code;
• the award was not made within the required time limit;
• the arbitrator or the arbitral tribunal did not have jurisdiction to hear the dispute;
• the arbitrator or the arbitral tribunal decided on matters beyond the scope of the arbitration agreement, exceeded its authority or did not decide on all matters indicated in the relief sought;
• the arbitral proceedings were not carried out in accordance with the procedures agreed between the parties or, if there was no such agreement, in accordance with the provisions of the International Arbitration Code and this failure had an impact on the merits of the award;
• the principle of equality of the parties was not respected;
• the subject matter of the dispute was not arbitrable under Turkish law; or
• the award is in conflict with Turkish public policy. 75 ibid, art 15.  

9.1.5 The last two grounds set out above, namely, arbitrability and Turkish public policy, are reviewed ex officio by the competent court for the application to have the award set aside. The burden of proof for the other grounds for setting aside lies with the party applying to set the award aside. 76  ibid  

9.1.6 Purely domestic awards which do not contain any foreign element and thus do not fall within the scope of the International Arbitration Code, can also be set aside based on the grounds and procedures set out in the Civil Procedural Code. 77 Civil Procedural Code, art 439. The grounds provided are almost identical to those listed above. 

9.1.7 Further, the courts are obliged to give priority to actions setting aside arbitral awards. 78 ibid, art 15  

9.2.1 An action for setting aside an award must be filed before the competent Regional Court of Appeals within 30 days. The period starts with the delivery to the parties of the award or the delivery of the correction, interpretation or additional award. 79 ibid

9.3.1 The decisions of the Regional Courts of Appeals as to the setting aside of awards are subject to appeal, with the appeal grounds being limited to the same grounds indicated above. 80 ibid   

9.3.2 Appeal proceedings are set out in the Civil Procedural Code, which is referred to in the International Arbitration Code. The appellant can apply directly to the Supreme Court of Appeals.

10.1.1 Enforcement procedures for awards issued in the territory of Turkiye differ depending on whether or not the arbitration contains a foreign element. 

10.1.2 If the arbitration contains a foreign element and therefore its proceedings are subject to the provisions of the International Arbitration Code, the application to set aside will automatically suspend the enforcement of the award. In order for such an award to be enforceable, a decision rejecting the set aside application must be final. 81 ibid

10.1.3 However, an application to set aside will not automatically suspend the enforcement of awards rendered as a result of arbitration proceedings which do not contain any foreign element and are subject to the Civil Procedural Code. 82 Civil Procedural Code, art 439.  Nevertheless, upon the request of the applicant, and on the condition that the applicant deposits security, enforcement may be suspended. 83 ibid

10.2.1 As mentioned above, Turkiye is a signatory state to the New York Convention. Pursuant to Article 90 of the Constitution of the Turkish Republic, the New York Convention has the same force in Turkiye as Turkish statutory provisions. The New York Convention is the main source for the enforcement of awards rendered outside of Turkiye. 

10.2.2 Turkiye acceded to the New York Convention with two reservations and limited the scope of the application of the New York Convention to:

• awards rendered in another signatory state on the basis of reciprocity; and 
• disputes arising out of legal relationships, whether contractual or not, which are considered to be commercial, as defined under the Turkish Commercial Code. 84 Turkish law provides a broad definition of commercial affairs. Pursuant to article 19 of the Turkish Commercial Code, in principle, all liabilities of merchants are considered to be “commercial”.  

10.2.3 If a foreign award remains within these parameters, the award will be enforced in Turkiye in accordance with the New York Convention. However, if the relevant award is excluded, then the provisions of the International Private and Procedural Code will apply to its enforcement in Turkiye.

10.2.4 The refusal grounds provided in the International Private and Procedural Code are almost identical to those listed in Article V of the New York Convention. However, unlike the New York Convention, Article 62 of the International Private and Procedural Code obliges the court to refuse enforcement of the award if one of the refusal grounds is proven.

10.2.5 A violation of public policy is listed as a refusal ground for foreign awards in both the New York Convention and the International Private and Procedural Code. The Turkish courts examine the award on public policy grounds of their own volition. However, the law does not provide an exhaustive list of examples of what constitutes a violation of public policy, and the concept is interpreted by the Turkish courts on a case-by-case basis. The Supreme Court of Appeals has ruled that a mere infringement or misrepresentation of statutory Turkish law provisions (including procedural rules) does not constitute a violation of public policy. 85 Turkish Supreme Court of Appeals, Grand Chamber of Unification of Jurisprudence, decision no. 2010/1 E. and 2012/1 K., 25 June 2015.   

11.1.1 Although there are no explicit prohibitions under Turkish law that restrict consumers from entering into arbitration agreements, the Supreme Court of Appeals considers arbitration agreements concluded between sellers and consumers as invalid. 86 Turkish Supreme Court of Appeals, 13th Civil Chamber, decision no. 2008/3492 E. and 2008/11120 K., 25 September 2008.   

11.2.1 Disputes arising from employment agreements are deemed to be non-arbitrable because they pertain to public order. However, Article 20 of the Turkish Employment Code No. 4857 provides for a mandatory arbitration procedure in respect of the resolution of certain collective employment disputes.

11.2.2 Furthermore, the Code on the Duties of Employment Courts No. 7036 has introduced a mandatory mediation mechanism under Turkish law for the settlement of employment disputes from 1 January 2018.