International Arbitration In Turkey
In Turkey, domestic and foreign arbitral proceedings are governed by separate laws. Domestic arbitral proceedings are conducted under the Civil Procedure Law No. 6100 (the CPL), adopted on 1 October 2011. The CPL also governs the recognition and enforcement of such domestic arbitral awards.
Foreign arbitral proceedings, however, are governed by the International Arbitration Law No. 4686 (the IAL), which entered into force on 21 June 2001. A copy of this International Arbitration Law No. 4686 can be found here: International Arbitration Law Of Turkey.
It is applicable for disputes with a ‘foreign element’ and for which the arbitration venue is selected as Turkey. The IAL is also applicable when it is selected by the parties or by the arbitral tribunal. A foreign element is deemed to exist when:
• the domiciles, permanent residences or places of business of the parties are in different states or in a state other than the arbitration venue;
• the place of performance of the agreement involved in the dispute is in a country other than the country where arbitration shall take place;
• at least one of the company’s shareholders who is a party to the principal agreement underlying the arbitration agreement has brought foreign capital to Turkey under the foreign capital encouragement regulations or if it is necessary to enter into a loan or security agreements to provide foreign capital from
abroad for implementation of this agreement; or
• the principal agreement or legal relationship underlying the arbitration agreement causes the movement of capital or goods from one country to another.
There are two main laws concerning the recognition and enforcement of foreign arbitral awards, the International Private and Procedural Law No. 5718 (the TPIL), which entered into force on 20 May 1982, and the New York Convention.
In addition to the foregoing, Law No. 4501, regarding principles to be adhered to upon resorting to arbitration in disputes arising from concession stipulations and agreements regarding public services, entered into force on 22 January 2000 to regulate in particular disputes between the Republic of Turkey and project firms concerning build-operate-transfer projects.
A number of legal guides have been made available concerning the modern arbitration legal regime provided by Turkish law:
- The Global Arbitration Review has a very good general guide to Turkish arbitration law;
- The PLC also offers a good overview of Turkish arbitration law;
- The law firm Hergüner Bilgen Özeke Attorney Partnership has also prepared a shorter general introduction: International Arbitration In Turkey – Legal Guide;
Please do not hesitate to contact us if you require additional information concerning international arbitration in Turkey, or the legal regime for enforcing awards in the country.