Since the International Arbitration Law came into force in 2001, the 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 the 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).
Who is in charge for 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
At the both organizations, there are many arbitrators who will perform the arbitration procedures. The first two organizations are in charge for solving the major international disputes. In Turkey, there are no specialized courts for international arbitration, but the courts in the main cities know the arbitration procedures and the legislation related to these.
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.