Türkiye: An Arbitration Overview

Overview

Türkiye is playing a dual role in arbitration now: while being an active user of international arbitration, it is also becoming a reliable arbitral seat. The consolidation and maturation that Türkiye is witnessing are the results of a series of developments in its arbitration landscape. Not only commercial actors, but also the state is using arbitration, and it is becoming a preferred mechanism among them. Moreover, in parallel, the judiciary, legislature, and institutional stakeholders are all moving towards a pro-arbitration environment, ensuring greater predictability and improved prospects for enforcement. Also, Türkiye has demonstrated a pragmatic and sophisticated approach to investor–state dispute settlement (ISDS). Türkiye and Turkish parties have been frequent users of the ISDS. As a result of this progress, Türkiye is advancing in international arbitration and also establishing Istanbul as a regional arbitration hub.

IIA v CCP: The Dualist Legal Framework

Türkiye’s legal framework for arbitration also follows a dualist structure just like its dual role in arbitration. Law No 4686 on International Arbitration (IIA), largely based on the UNCITRAL Model Law, governs international arbitrations. This includes cases where at least one party is a foreign national, or where the dispute involves the cross-border flow of capital or goods. On the other hand, the Code of Civil Procedure (CCP) governs domestic arbitrations. Alignment between CCP’s articles on arbitration, IIA and the UNCITRAL Model Law ensures a unified standard for arbitration users. Türkiye is also a party to the New York Convention, which the courts regularly apply in their arbitration-related case law.

It is noteworthy that the fixed fee (rather than a fee proportionate to award value) for enforcing foreign arbitral awards under Law No 7318 on Amending the Tax Procedure Law and Certain Other Laws continues to help parties cap legal fees at reasonable levels.

On the policy side, the Ministry of Justice and the Presidency of the Republic continue to encourage arbitration through legal reform agendas. One example of these agendas is Judicial Reform Strategy 2025–2029, which targets enhancing the effectiveness of mediation and arbitration. Accordingly, the Ministry is planning to expand institutional arbitration across various fields.

Istanbul as a Rising Arbitration Hub

Istanbul is becoming an arbitration hub. The caseload data from the Istanbul Arbitration Centre (ISTAC), Türkiye’s leading arbitration institution, proves Istanbul’s growing popularity among arbitration users. The number of applications to ISTAC increased from 138 cases in 2023 to 167 in 2024 and reached 263 in 2025. This marks a 57% increase in the number of applications in 2025 when compared to 2024.

Institutional developments also support the increasing popularity of arbitration. The Union of Turkish Bar Associations and ISTAC jointly organise arbitration counsel training programmes to introduce domestic arbitration to professionals. Also, remote hearings and e-filings became standard thanks to ISTAC’s case management portal and digital infrastructure.

Moreover, Istanbul hosted several international arbitration events. The Istanbul Arbitration Days in 2025 featured over 70 speakers and participants from 45 countries. The 19th ICC Türkiye Arbitration Day, held in Istanbul in November 2025, also gathered practitioners, academicians, and counsels to discuss the latest issues in international arbitration. These developments demonstrate that Istanbul is strengthening its position within the arbitration landscape.

ISDS Practice and Treaty Arbitration

As of early 2026, Türkiye has signed 106 bilateral investment treaties (BITs), 89 of which are in force. These treaties largely follow a traditional structure; however, more recent BITs increasingly incorporate modern elements, including provisions on environmental protection and sustainable development, and refined FET standards.

Türkiye has been a contracting state to the ICSID Convention since 1989 and is also a party to the Energy Charter Treaty. In parallel, the Turkish government actively participates in ISDS reform discussions within UNCITRAL Working Group III, supporting balanced procedural reforms aimed at preventing treaty abuse while preserving effective investor protection.

According to ICSID’s Caseload Report for the 2025 fiscal year, one new case was registered against Türkiye as a respondent state. At the same time, Turkish investors continue to be active users of ISDS mechanisms abroad, reflecting Türkiye’s position both as a capital-importing and capital-exporting state.

Recent Trends in Turkish Case Law Regarding Arbitration

In 2025, Turkish courts continued their shift toward a more arbitration-friendly approach. As a natural consequence of the growing number of arbitrations involving Turkish parties, Türkiye as the seat, or Turkish law as the governing law, the courts were confronted with arbitration-related matters more frequently. This increased exposure and familiarity have, in turn, contributed to the development of a more consistent, informed, and arbitration-supportive judicial approach and case law. A few specific examples illustrate this trend more concretely.

One landmark ruling, departing from the court’s earlier approach, is about interaction between arbitration agreements and bankruptcy proceedings. The Court of Cassation General Assembly held in its decision dated 1 October 2025 (E. 2025/6-512, K. 2025/591) that where a valid arbitration agreement exists, creditors must first obtain an arbitral determination of the existence and amount of the debt before initiating bankruptcy proceedings. Direct recourse to the general bankruptcy route was considered an attempt to circumvent the arbitration clause, contrary to the principles of good faith and pacta sunt servanda.

Another ruling where the court again departed from its earlier approach addresses the validity of an arbitration clause co-existing with a non-exclusive English court jurisdiction clause. The Court of Cassation General Assembly, in its decision dated 1 October 2025 (E. 2024/653, K. 2025/584) held that the existence of a clear and unequivocal intent to arbitrate must first be assessed under the lex fori (Turkish law). Reading the contract as a whole, it found that granting “non-exclusive” jurisdiction to English courts created ambiguity as to whether arbitration was truly the exclusive dispute-resolution mechanism. In this regard, the court held that the parties’ intention to arbitrate was not sufficiently clear, rejected the arbitration objection, and ruled for the local court proceedings to continue.

At the same time, a key structural issue in Türkiye’s arbitration practice remains the multi-stage enforcement process for arbitral awards. The need to pass through separate recognition, enforcement, and execution stages may prolong proceedings and dilute the efficiency advantages of arbitration. Addressing this structural hurdle would constitute an important step towards further strengthening Türkiye’s arbitration-friendly environment.

In general, Turkish courts are showing an increasingly restrained approach in the recognition and enforcement of foreign arbitral awards under the New York Convention. Over time, public policy objections have been interpreted more narrowly, and courts have become progressively more reluctant to engage with the merits of the dispute, thereby enhancing legal certainty and predictability at the enforcement stage.

Conclusion

Taken together, these developments show that Türkiye’s arbitration landscape has reached a stage of consolidation and maturation. The steady growth in arbitral activity, the alignment of the legal framework with international standards, and the increasingly consistent and informed approach of the courts all contribute to a predictable and reliable arbitration environment. Arbitration is no longer viewed as an alternative or exceptional mechanism, but as an integral part of dispute resolution practice for both private actors and the state. Supported by institutional capacity and international engagement, Türkiye is steadily strengthening its position as a regional arbitration hub that can be trusted by both local and international users.