What Is Arbitration?

Arbitration is an alternative dispute resolution (ADR) method in which parties agree to resolve their disputes outside of court, usually through a private and binding decision made by one or more arbitrators. The process is often faster, less formal, and more flexible than traditional litigation.

Legal Framework for Arbitration in Turkey

Domestic Arbitration

Domestic arbitration in Turkey is governed by the Turkish Code of Civil Procedure (Law No. 6100). This law applies to arbitration cases that do not contain a foreign element and provides clear guidelines on the appointment of arbitrators, arbitration procedures, and enforcement of arbitral awards.

International Arbitration

International arbitration is regulated by the International Arbitration Law of Turkey (Law No. 4686), which came into effect in 2001. It applies when there is a foreign element involved, such as a foreign party or cross-border transaction. This law is closely aligned with international standards, particularly the UNCITRAL Model Law, making Turkey an arbitration-friendly jurisdiction for foreign investors.

Key Arbitration Institutions in Turkey

Istanbul Arbitration Centre (ISTAC)

ISTAC is Turkey’s most prominent arbitration institution, offering modern rules and efficient administration. It provides both national and international arbitration services and has gained global recognition for its credibility and neutrality.

Union of Turkish Bars Arbitration Center

This center offers arbitration services primarily for legal professionals and commercial disputes within Turkey. It operates in accordance with domestic arbitration laws and is recognized by Turkish courts.

International Institutions

Many international parties also choose institutions such as the ICC (International Chamber of Commerce) or the LCIA (London Court of International Arbitration) when arbitrating disputes related to Turkey. These bodies provide additional neutrality and are especially favored in high-value or complex cases.

Key Features of Arbitration in Turkey

1. Arbitration Agreement

An arbitration agreement is the cornerstone of the process. In Turkey, it must be in writing and can be included either in the main contract (as an arbitration clause) or as a separate agreement. Turkish courts generally uphold the validity of arbitration agreements unless they are ambiguous or involve non-arbitrable matters.

2. Selection of Arbitrators

Parties are free to appoint one or more arbitrators, and there is no requirement for them to be Turkish nationals or lawyers. If parties cannot agree, the appointment is made by the competent court or arbitration institution.

3. Arbitral Procedure

Turkish arbitration laws grant flexibility in determining the procedural rules. Parties may choose institutional rules (such as ISTAC or ICC) or opt for ad hoc arbitration. The principles of equality, impartiality, and the right to be heard must always be observed.

4. Seat and Language of Arbitration

The seat of arbitration determines the applicable procedural law. Parties can choose Turkey or another country as the seat. Additionally, the language of arbitration can be freely determined by the parties, which is especially beneficial for international disputes.

Enforceability of Arbitral Awards in Turkey

Domestic Awards

Domestic arbitral awards are enforceable through a simplified court recognition process. Unless challenged within 30 days, the award becomes final and enforceable.

International Awards

Turkey is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958). This means that foreign arbitral awards are generally recognized and enforced in Turkey, subject to limited exceptions such as public policy violations or lack of due process.

Advantages of Arbitration in Turkey

1. Speed and Efficiency

Court litigation in Turkey can be time-consuming due to procedural complexities and caseloads. Arbitration offers a faster resolution, often concluding in 6–18 months depending on the case.

2. Confidentiality

Unlike court proceedings, arbitration is private. This confidentiality is particularly valuable for businesses that need to protect trade secrets or sensitive commercial information.

3. Expertise of Arbitrators

Parties can select arbitrators with specialized knowledge in the relevant field—whether it be construction, finance, energy, or international trade—ensuring a more informed and relevant decision.

4. Flexibility

Arbitration allows for tailored procedures, including digital hearings, language preferences, and procedural timelines, all of which are attractive for international companies.

5. International Enforceability

Thanks to Turkey’s membership in the New York Convention, awards made in Turkey are enforceable in over 160 countries and vice versa, providing significant value in cross-border transactions.

Challenges and Considerations

1. Cost

While arbitration can be cheaper than litigation in the long run, upfront costs (such as arbitrator fees, institutional charges, and legal representation) can be high. Parties should weigh this against the benefits of speed and enforceability.

2. Judicial Intervention

Although Turkish courts generally support arbitration, they can still intervene in certain stages—such as in the appointment of arbitrators, interim measures, and enforcement proceedings. However, courts are becoming increasingly arbitration-friendly.

3. Arbitrability Limitations

Some matters, such as criminal cases, family law disputes, and certain administrative issues, are not subject to arbitration under Turkish law. It’s crucial to assess whether a dispute is arbitrable before drafting an arbitration clause.

Recent Developments and Trends

Turkey has taken significant steps to promote arbitration. The government and legal community are working to position Istanbul as a regional arbitration hub. ISTAC’s increased visibility, integration of online dispute resolution, and enhanced international cooperation are indicators of Turkey’s commitment to modern arbitration practices.

Moreover, Turkish courts are showing greater deference to arbitration clauses and are less likely to interfere with arbitral awards unless there are compelling reasons. This is a positive trend that reinforces Turkey’s reputation as a reliable arbitration venue.

The Role of an Arbitration Lawyer in Turkey

Choosing the right arbitration lawyer in Turkey is critical to success. These professionals bring in-depth knowledge of Turkish and international legal principles. They work within esteemed institutions such as an Ankara law firm, ensuring tailored strategies for arbitration cases.

Whether you’re a multinational company or a foreign investor, finding the best lawyer in Turkey is essential for legal clarity. Legal advisors with a strong command of English are particularly valuable. An English speaking lawyer or English speaking lawyer in Turkey offers seamless communication and professional service.

Engaging with a legal advisor in Turkey ensures you are backed by expert knowledge in both domestic and international laws. These professionals often work at reputable institutions like an Ankara law office or a trusted lawyer in Turkey.

Benefits of International Arbitration in Turkey

International arbitration in Turkey has grown rapidly. With Turkey’s strategic location, legal reforms, and experienced arbitration panels, it is now a credible venue for resolving transnational disputes. Major corporations rely on a dedicated international law firm to manage cases effectively.

An experienced Ankara lawyer understands the local judicial culture and international expectations. Whether part of an Ankara law firm or independently practicing, they provide robust representation in arbitration and other legal services.

Choosing the Right Ankara Law Firm

A top-tier Ankara law firm combines local insight with global expertise. These firms often have teams of bilingual or multilingual professionals, making it easier for foreign clients to navigate the legal system with an English speaking lawyer in Turkey by their side.

From contract disputes to investment arbitration, a seasoned arbitration lawyer can guide you through each step of the process. Their deep familiarity with the intricacies of arbitration in Turkey ensures clients receive strategic advice and effective advocacy.

Whether you’re seeking expert legal counsel, navigating complex cross-border disputes, or entering commercial agreements, Turkey offers a robust platform for arbitration and legal representation. Partnering with a reputed lawyer in Turkey or an Ankara law office can make all the difference. Explore more about international arbitration in Turkey and secure your legal future today.

Turkey is one of the increasingly important destinations for commerce, travel as well as investment with significant opportunities. Since Turkey is an important commercial hub as such, the possibility of disputes over which Turkish courts are competent to resolve are quite high under the conflicts of law rules. The main code that regulates lawsuits involving foreigners and foreign elements in Turkey is the International Private and Civil Procedure Law.  In addition, depending on the individual case, other legislation can also be applied to the underlying dispute.  This article looks into the procedural rules of litigation in Turkey within the framework of Turkish Private Law. 

How to file a lawsuit in Turkey?

First Step:  Analysis of the Dispute and Drafting the Petition

Before filing a lawsuit before Turkish courts, the correct analysis of the concrete dispute between the parties is one of the most important issues to consider. According to Turkish Law, courts can hear a case only if it is authorized by law. Basically, the Turkish judiciary has three branches: criminal, civil, and administrative. If a criminal act is at issue, the victim can sue before the criminal courts. 

An administrative lawsuit can be filed before administrative courts against an unlawful act or transaction of the administration to revoke such measure as well as claim damages.

As an example, in the area of public procurement, administrative courts adjudicate cases regarding public tender procedures, as well as disputes arising from administrative acts such as prohibition from participating in public tenders. It should however be stated that, under the relevant law, once an administrative authority and a real or legal person enter into a public procurement contract following the completion of the tender procedure, the administrative court is no longer competent. This is because contracts executed subject to the Public Procurement Contracts Law are legally deemed as private contracts between two parties, and in case of disputes, civil courts have jurisdiction over them. 

Civil courts have jurisdiction to resolve cases involving private law issues, which are the most common cases between trading foreign and local parties. For instance, a foreign party that is unable to collect its receivables from a local party should file a lawsuit before the civil courts. 

The civil courts hear the cases based on their area of specialization, as regulated under Turkish Law. Accordingly, in the Turkish legal system, civil courts are divided as follows:

1. Courts of General Jurisdiction,

2. Courts of Peace,

3. Commercial Courts

4. Labor Courts

5.  Family Courts

6. Enforcement and Execution Courts

7. Consumer Courts

8. Cadastral Courts

9. Civil Courts for Intellectual and Industrial Property Rights 

The Civil Courts of General Jurisdiction are the courts that have the widest jurisdiction over civil law disputes, and therefore,  there is at least one civil court of general jurisdiction in any jurisdictional area; whereas the specialized courts are mainly found in larger jurisdictional areas in Turkey. Thus, in the event that there is no specialized court at the place where the lawsuit must be filed according to the rules of jurisdiction, the courts of general jurisdiction are competent to hear the case in the capacity of that specialized court.

In addition to the above, the civil court of general jurisdiction is the competent court for the recognition and enforcement (“tanıma ve tenfiz”) of foreign judgments and arbitral awards. The same way in almost all jurisdictions worldwide, foreign court decisions and international arbitral awards need to obtain a recognition and enforcement decision by Turkish Courts to become enforceable in Turkey. Consequently, those who wish to have their foreign judgments enforced in Turkey must first file a lawsuit for their recognition or enforcement, and then apply to the execution offices with the enforcement decision. 

Civil commercial courts handle commercial disputes and those that arise between merchants.  When real or legal person merchants doing business in Turkey have a legal dispute with their Turkish counterparts, such as breach or unlawful termination of the contract,  then the commercial courts are competent to resolve the conflict.

Apart from the correct determination of the competent court for the underlying dispute, case analysis is also crucial for deciding on the claims to be submitted to the court. It is very important that the claims are determined in a precise and clear manner. This is because, in Turkish law, claims and defenses cannot be expanded beyond the first petition subject to few exceptions.

Second  Step: Submission of the Petition to the Court and Payment of Court Fees

A lawsuit is filed when the petition is submitted to the competent court, and the legal fees and expenses are deposited with the court’s offices. Under  Turkish Law, there is a dual juridical fee structure, consisting of proportional fees or fixed fees. The fees and expenses are determined based on the title of the parties (consumer, merchant etc.), the subject of the case, and the amount of dispute. 

In addition to that, due to Turkish Law, the party who relies on a certain evidence must pay the expenses relating to the evidence.  For instance, if a party would like to rely on an expert report, she/he must pay for such expert’s expenses. 

Apart from the above, foreign parties involved in a Turkish lawsuit are also subject to a security fee requirement. Security fee can be defined as a sum of money to be paid to the court’s offices, usually in the amount of 10-20% of the disputed amount, to be able to file a lawsuit by foreign real or legal persons. That being the case, if there is an agreement between Turkey and the state of residence of the foreign plaintiff, or if, in practice,  the reciprocity principle applies, the foreigner may be exempted from payment of the security fee.

Third Step: Petition of Reply, Expert Report, Witnesses

The respondent has to submit its reply within two weeks following the service of the petition according to Turkish Law. After the petition of reply, if deemed necessary, the court forwards the case file to the expert/panel of experts,  hears the witnesses, examines the new submissions. The parties can object to the expert report and statements of witnesses etc. During this phase, the parties attend hearings and expert examinations in certain specific situations.

Fourth Step: Decision

When the court completes its examination, it renders a judgment.  Every court judgment  must include the reasoning of the judges and indicate the time period and procedure of appeal. The party against whom the court decides can appeal the decision within the prescribed time-limit, whereas the other party declared rightful by the court can proceed with enforcement and execution. In Turkish Law, in principle, appealing a court decision does not suspend the execution, subject to limited exceptions. However,the appealing party may request suspension of the execution to the Appeal Court by depositing a security fee to the execution offices, in which case execution is suspended until the appellate court renders its decision. 

Litigation in Turkey, briefly summarized above, is governed by a complex set of procedural rules that are subject to changes from time to time. This makes it necessary to carefully assess the relevant cases and determine the correct legal strategy to achieve timely and favourable results in litigation which can be a lengthy process. Therefore it is recommended to always obtain competent legal assistance before filing a lawsuit in Turkey to avoid any loss of rights.   

Introduction

Incoterms are a series of pre-defined commercial terms that have been issued by the International Chamber of Commerce (ICC) relating to international commercial transactions[1] since 1930. Since then, the ICC tends to revise the rules within the first year of every decade.

The Incoterms usually consist of 3 letters which are aimed to primarily clarify the risks, costs, and tasks regarding international transportation and the delivery of goods. The main objective of Incoterms is rather to define respective obligations of the parties in an international sales contract than governing the contract itself. The rules simply set out the obligations which the seller and the buyer have to follow. “The Incoterms® rules describe the following terms as below:

Obligations: Who does what as between seller and buyer, e.g. who organizes carriage or insurance of the goods or who obtains shipping documents and export or import licenses;

Risk: Where and when the seller “delivers” the goods, in other words where risk transfers from seller to buyer; and,

Costs: Which party is responsible for which costs, for example, transport, packaging, loading or unloading costs, and checking or security-related costs.”[2]

The most recent Incoterms published this year (2020) is actually the ninth set of the terms issued by the ICC. It contains 11 rules, which are mainly the same as the earlier 2010 version, with the difference that the term DAT, “Delivered at Terminal” has been removed, and replaced by a term called DPU: “Delivered at Place Unloaded”. The rules are basically divided into two categories based on the delivery method: the rules regarding any type of transport, and the rules for sea and inland waterway transport.[3]

Rules

Incoterms for any type of transport

EXW-Ex Works (named place of delivery) provides that the seller makes goods available at its premises or a prior accepted place. This term might benefit the seller since it places the maximum obligations on the buyer, as in this method, the buyer undertakes the risks of delivering the goods to the final destination.

FCA-Free Carrier (named place of delivery) foresees that the seller delivers the goods to a place that the parties have reached an agreement upon, usually the seller’s premises.

•     CPT-Carriage Paid To (named place of destination) provides that the seller pays for the carriage of the goods till they arrive to the agreed place of destination.
•     CIP- Carriage and Insurance Paid to (named place of destination) is almost the same with CPT, the only difference being that, in CIP the seller is obliged to obtain necessary insurance for the goods throughout the transit.
•     DPU-Delivered At Place Unloaded (named place of destination) provides that the seller is obliged to cover the cost of the transport, which includes carriage, unloading, export fees and undertakes all risk until the goods arrive in the designated port or terminal.
•      DAP- Delivered At Place (named place of destination) foresees that the risk passes from the seller to buyer from the point of destination agreed upon in the delivery contract beforehand.
•      DDP- Delivered Duty Paid (named place of destination) provides that the seller undertakes the duty of customs; the risk and transportation duties are the same as DAP.

Incoterms for sea and inland waterway transports

•         FAS-Free Alongside Ship (named port of shipment): Under FAS, the seller delivers when the goods are placed alongside the buyer’s vessel at the named port of shipment. This creates a situation where the buyer has to bear all the costs and risks of loss or damage to the goods from that moment.
•         FOB-Free on Board (named port of shipment): This incoterm foresees the seller to arrange for export clearance and the buyer pays for the marine freight transportation, insurance, bill of lading fees and unloading and transportation costs from the arrival port to the designated destination. It can be said that FOB is the most widely used incoterm.
•         CFR- Cost and Freight (named port of destination): By agreeing on CFR delivery in a contract, the parties mainly agree on the seller paying the carriage of the goods up to the named port of destination. Risk passes to the buyer when the goods are loaded on board of the ship in the country of export.
•         CIF- Cost, Insurance & Freight (named port of destination): Although this incoterm is similar to CFR, with CIF the seller is required to obtain the insurance for goods through the transit phase. The seller is expected to turn over the necessary documents.[4]

INCOTERMS in Business

Since the INCOTERMS aren’t codified within the Turkish Code of Obligations, any Code of Obligation or in any statute, updating or modifying the term in specific cases is easier. Also knowing that these rules have been used for decades and are being revised every 10 years, one can assume that any kind of relevant dispute has already arisen and resolved in a way that makes commercial sense.

Additonaly, keeping in mind that the ICC’s main idea is to create a uniform commercial life, choosing the best INCOTERM term would provide nothing but benefits to both parties.[5] However selecting the best INCOTERM for the particular commercial relationship in terms of profitability and safety is still important, which might vary based on the parties’ positions and other factors.

Conclusion

With the ninth set of INCOTERMS that have been published by the ICC for the 2020s, grand changes are not in motion. Still, choosing the best INCOTERM that is best suited to a particular contract is an area that necessitates the assistance of a legal expert with knowledge of International Commercial Law.

For example if a commercial transaction is to take place between Turkey and Italy, what would be ideal is to find a lawyer who is knowledgeable with respect to the laws of both these countries. Otherwise, minor differences that tend to be ignored in the beginning of a commercial relationship might become major disputes later. As it is well known, however, preventing disputes from happening is the most efficient and affordable way of doing business. For more information please seek an expert lawyer on international contracts.

[1] INCOTERMS® 2020

[2] Ibid INCOTERMS® 2020

[3] https://2go.iccwbo.org/downloadable/customer/pdf/

[4] https://www.trade.gov/know-your-incoterms

[5] In Turkish: The Journal International Trade and Arbitration Law Year 2012/I 1p.  149