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International Arbitration

Arbitration can be defined as resolution of disputes that arise within a scope of issues, which can legally be settled via arbitration through individuals called “arbitrators,” rather than applying to state jurisdiction.

Disputes began to be settled via arbitration instead of state jurisdiction in today’s business environment, where international commercial relations rapidly increase. Resolution of international disputes via arbitration brings many advantages in terms of providing impartial jurisdiction, a quicker process than state jurisdiction, and effective resolution mechanisms.

Nowadays, parties may prefer to settle disputes where Turkish companies are one of the parties before ICC (International Chamber of Commerce), ICSID (International Center for Settlement of Investment Disputes) or LCIA (London Court of International Arbitration).

 

ICC ARBITRATION (INTERNATIONAL CHAMBER OF COMMERCE)

It is an institute which deals with resolution of disputes before the International Court of Arbitration, affiliated with the International Chamber of Commerce (ICC) according to ICC Dispute Resolution Rules since 1923.

International Court of Arbitration is composed of a chairman, a vice-chairman and 50 members. The ICC Council elects the chairman and the chairman appoints the vice-chairman. The Council appoints the members upon recommendation of ICC National Committee. International Court of Arbitration has a Secretariat.

The party who wishes to request arbitration under ICC Dispute Resolution Rules shall deliver their request for arbitration to the Secretariat and the Secretariat shall notify the Claimant and the Respondent that such request is received and the date of delivery thereof. The date of delivery of the request to the Secretariat shall be considered to be the beginning date of arbitration procedure in all cases. Within the framework of ICC Dispute Resolution Rules, the decision on disputes shall be made by one and/or three arbitrators. If parties cannot agree on the number of arbitrators, the Council appoints only one arbitrator. If the Council determines that it is necessary to appoint three arbitrators for the dispute, each party shall nominate one arbitrator.

According to ICC Dispute Resolution Rules, the Arbitration Board should make the final decision in principle within 6 months. However, the Arbitration Board may extend said period. The decisions of the arbitrators are binding upon the parties. ICC Dispute Resolution Rules can be found from the ICC's web site.

 

ICSID ARBITRATION (INTERNATIONAL CENTER FOR SETTLEMENT OF INVESTMENT DISPUTES)

In 1965, the World Bank put a settlement and arbitration system into practice for investment disputes by establishing the International Center for Settlement of Investment Disputes (ICSID) under a convention. The Center is in Washington, D.C. where the headquarters of the World Bank is located.

It became a part of Turkey’s domestic law after ICSID Convention is signed in 1988 (Official Journal, 6.12.1988- 19830).

Three different legal mechanisms can be used in request for arbitration before ICSID. Accordingly; a it is necessary that a record should be provided in terms of resolution of disputes by request for arbitration before ICSID in the agreement signed between the investor and hosting state with regards to a certain investment; b. It is used in the cases where there is a bilateral investment agreement signed between the state to which the investor is registered and the state to which the investment is made, and the request for arbitration in terms of the dispute resolution is made before ICSID by basing on the provisions of bilateral agreement. In order to start the arbitration process by basing on the provisions of bilateral agreement, ICSID arbitration process should be foreseen in the agreement in case of dispute; c. It is possible to request arbitration in terms of resolution of disputes before ICSID by basing on the provisions of multilateral international agreements. For example, in a case where a multilateral investment agreement is signed between the state, where the investor is registered, and Turkey, namely European Energy Agreement: disputes which may arise between the investing company and the invested state can be settled by ICSID arbitration. ICSID Rules can be found from the ICSID's web site.

 

LONDON COURT OF INTERNATIONAL ARBITRATION (LCIA)

LCIA, which is established especially for rapid and economical resolution of international disputes in London in 1883, displays activities as one of the global institutions applied in resolution of many disputes nowadays. Its name is changed in the recent years. It is now called “London Court of International Arbitration (LCIA)”. LCIA’s headquarters are located in London.

Although LCIA is based in London, 80% of the parties of disputes that are settled by LCIA are not citizens of the United Kingdom. This demonstrates that LCIA is an arbitration institute also for multinational disputes.

LCIA arbitration board functions for appointing courts, determining questions of the arbitrators and taking fees under control in requests for arbitration according to LCIA Arbitration Rules.

Rapidness, economical and technical aspects of international disputes are considered. One of the main principles of LCIA is to ensure amicable resolution of disputes if settling disputes is possible.

LCIA Arbitration Rules can be found from the LCIA's web site

 

 

 

 

 

Related Legislation

Turkish International Arbitration Law Numbered 468 ...

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Icsid Rules Of Procedure For Arbitration Proceedin ...

CHAPTER    1   ESTABLISHMENT  OF THE TRIBUNAL   Rule 1   General Obligations   (1) Upon notification of the registration of the request for arbitration, the parties shall, with all possible dispatch, proceed to constitute a Tribunal, with due regard to Section 2 of Chapter IV of the Convention.   (2) Unless such information is provided in the request, the parties shall communicate to the Secretary-General as soon as possible any provisions a...
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Icc Rules Of Arbitration ...

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Istac Arbitration Rules ...

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International Arbitration Law Of Turkey ...

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Lcia Arbitration Rules Effective 1 October 2014 ...

LCIA ARBITRATION RULES Preamble Where any agreement, submission or reference howsoever made or evidenced in writing (whether signed or not) provides in whatsoever manner for arbitration under the rules of or by the LCIA, the London Court of International Arbitration, the London Court of Arbitration or the London Court, the parties thereto shall be taken to have agreed in writing that any arbitration between them shall be conducted in accordance with the LCIA Rules or such amended rul...
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Icsid Arbitration Rules ...

ICSID CONVENTION ARBITRATION RULES   Chapter I Establishment of the Tribunal Rule 1 General Obligations (1) Upon notification of the registration of the request for arbitration, the parties shall, with all possible dispatch, proceed to constitute a Tribunal, with due regard to Section 2 of Chapter IV of the Convention. (2) Unless such information is provided in the request, the parties shall communicate to the Secretary-General as soon as possible any provisions agreed by t...
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Uncitral Arbitration Rules ...

UNCITRAL Arbitration Rules (as revised in 2010) Section I.   Introductory Rules Scope of application Article 1   Where parties have agreed that disputes between them in ­respect of a defined legal relationship, whether contractual or not, shall be referred to arbitration under the UNCITRAL ­Arbitration Rules, then such disputes shall be settled in accordance with these Rules subject to such modification as the parties may agree.   The parties t...
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