Turkey: Istanbul Arbitration Center Rules Of Arbitration


The first step towards establishing an International Center of Finance in Istanbul was taken through a resolution of the Turkish Higher Planning Council1. One of the pillars of the Istanbul Finance Center and one of its priorities is the establishment of an independent and autonomous institutional arbitration center that is capable of competing internationally2. The Istanbul Arbitration Center ("ISTAC") is established in line with these objectives to provide services for institutional arbitration.3 This arbitration center is expected to be ahead of other arbitration institutions in matters such as speed and finalization of awards.

ISTAC Rules of Arbitration and Rules of Mediation ("ISTAC Rules of Arbitration" or "Rules") entered into force on 26 October 2015. The Rules comprise provisions that both reflect generally accepted practices in international arbitration, and provide solutions to the current needs of arbitration and mediation processes.

General Information

ISTAC is comprised of a national court, an international court (together, the "Court") and a secretariat ("Secretariat"). The structure and function of the Court and the Secretariat are governed by Appendix II of the ISTAC Rules of Arbitration. The Court shall manage the process of resolution of disputes by the sole arbitrator or the arbitral tribunal.

ISTAC Rules shall be applicable under two instances. The first instance is an agreement for disputes to be resolved pursuant to the ISTAC Rules of Arbitration. The second is for the parties to an ad hoc arbitration to foresee that the arbitrators are appointed by the Court. In the latter case, the Court shall act as the appointing authority.

Arbitral Proceedings

Commencing the Arbitration

In order for arbitration proceedings to commence, the claimant party shall submit to the Secretariat the arbitration agreement, the request for arbitration containing summary explanations, the relief sought, as well as a statement on matters, including the number and appointment of arbitrators, place and language of arbitration, and shall pay the filing fee. In case of any deficiency, the Secretariat shall grant the claimant party with a 15 day period. In the event of failure to correct the deficiencies within this period, the arbitration file shall be closed. The claimant may commence the arbitration proceedings by directly submitting a statement of claim in lieu of a request for arbitration.

The respondent party shall respond to the request for arbitration within 30 days. An additional period may be granted to submit the answer to the request for arbitration; nevertheless, the respondent party shall provide a statement on matters, such as the determination of arbitrators within the said 30 day period, nonetheless. A respondent may initiate a counter claim, together with the answer to the request for arbitration. In the event a counter claim is made, the respondent shall also pay a filing fee. In this case, the claimant to the initial arbitration shall submit an answer to the counter claim, either within the 30 day period, or, if an additional time is granted by the Secretariat upon request, within the specified time limit.

Arbitration Agreement and Competence-Competence

Any objection governing the existence, validity, content, scope and application of the arbitration agreement shall be raised, together with the answer to the request for arbitration. In the event such an objection is raised, or, in the absence of an answer to the request for arbitration, the matter shall be resolved by the unique arbitrator, or the arbitral tribunal. The sole arbitrator or the arbitral tribunal is also authorized to resolve on their competence.

Consolidation of Arbitrations

Upon the request of a party, and in the event certain conditions are met, multiple arbitrations filed under the ISTAC Arbitration Rules may be consolidated. In the event the parties to the arbitrations are not the same - in other words, in order to joinder additional parties, all parties concerned should consent to the consolidation of arbitrations. If the parties to the multiple arbitrations are the same, either the parties all parties concerned should reach a consensus for consolidation, or all claims in the arbitrations should arise from the same arbitration agreement, or if there are parties relying on different arbitration agreements, the disputes should relate to the same legal relationship and the arbitration agreements concerned should be compatible with each other.


The parties shall freely determine the number of arbitrators. The Rules refer to one arbitrator as the "sole arbitrator", and to multiple arbitrators (who must be an uneven number of arbitrators) as the "arbitral tribunal/board". This article shall use the term arbitrator(s) to refer to both the sole arbitrator, and the arbitral tribunal.

The parties shall unanimously appoint the sole arbitrator. If an agreement cannot be reached, the Court shall appoint the sole arbitrator. For an arbitral tribunal to compose, each party shall elect one arbitrator who shall be charged with determining the third arbitrator. As is the case for the sole arbitrator, in the event the third arbitrator cannot be designated, it shall be appointed by the Court.

In both cases, the arbitrator(s) shall be, and are expected to remain throughout the arbitration proceedings, impartial and independent; otherwise, the rules applicable to the challenge and replacement of arbitrator(s) may be referred to and be applicable.

Arbitral Proceedings

The ISTAC Arbitration Rules regulates the principles and rules applicable to the proceedings under its Section IV entitled "Arbitral Proceedings". Some of the material principles and rules are summarized, below:

  • The parties to a dispute have a right to fair trial. The arbitrator(s) shall conduct the proceedings, fairly, impartially, with a view to ensure equality of the parties.
  • The proceedings shall be swiftly conducted with a view to cause minimal costs; hence, cost and time effectiveness is essential.
  • Unless agreed to the contrary, the arbitral proceedings shall be confidential.
  • Procedural matters not regulated under the Rules shall be subject to the rules agreed to by the parties, in the absence of which, to the rules determined by the arbitrator(s).
  • All parties to a proceeding shall act in compliance with the good faith principle.
  • Unless otherwise agreed upon, the place of arbitration shall be Istanbul.
  • The merits of the case shall be subject to the law designated by the parties. In the event that no such law applicable to the merits is specified, the arbitrator(s) shall apply the legal provisions they deem fit.
  • Unless agreed to the contrary by the parties, immediately following the submission of the request and the answer to the request for arbitration, the arbitrator(s) shall draft a terms of reference including information on, among others, the summary of claims and defenses of the parties, matters such as the language and place of arbitration, and identity and contact information of the arbitrator(s) and party representatives. The parties and the arbitrator(s) shall sign these terms of reference.
  • Together with the issuance of the terms of reference, a procedural timetable shall also be prepared and circulated to the parties and to the Secretariat.
  • Unless agreed to the contrary, and provided that it shall not result in a severe consequence, such as an unfair burden on the other party, the relief sought is subject to change and amendment throughout the arbitration proceedings.
  • The arbitrator(s) may resort to all methods deemed suitable to determine the facts, including examination of the parties, witnesses, and experts, appointment of experts, and on-site inspections. Similarly, the arbitrator(s) may request a hearing for the examination of witnesses, experts, and specialists.
  • In the event of urgent matters that cannot await the appointment of arbitrator(s), an application may be made to the Secretariat for legal interim measures under Appendix I of the Rules, which are the Istanbul Arbitration Center Emergency Arbitration Rules. Otherwise, unless agreed to the contrary, the arbitrator(s) shall be authorized to apply legal interim measures that they deem fit.

Completion of the Examination Phase and Award

The arbitrator(s) shall notify the parties and the Secretariat in writing, as soon as possible after the latter of the last hearing or the last round of written submissions that the examination phase is complete. As of this date, unless leave is granted by arbitrator(s) in exceptional circumstances, the parties may not provide additional claims, defenses or evidence.

A party having participated in the arbitration proceedings without raising any objections as to the Rules, conduct of arbitration proceedings, orders given by the arbitrator(s), or the composition or appointment of arbitrator(s), shall be deemed to have waived such objections.

In principle, the arbitrators shall render their award on the merits within six months starting from the approval of the terms of reference. The swift resolution of proceedings is a need that arose in the practice of arbitration, which also constitutes one of the objectives of the ISTAC. This matter will be raised again under our discussions, below, governing expedited arbitrations. Notwithstanding this, however, through the agreement of the parties, or the request of the arbitrator(s), or ex officio, the Court is authorized to grant extensions to this period.

The award shall, among others, contain the operative part and its justification. The award shall be transmitted to the Secretariat, who shall communicate the award to the parties, provided that the costs of arbitration are paid in its entirety. The arbitral award shall be binding on the parties.

Clerical or computational errors in the awards may be corrected by the arbitrator(s) at their own initiative within 30 days. The parties may request that the award is interpreted, or any clerical or computational errors in the award are corrected, within the same period. Likewise, they may apply to the Secretariat with the request of complementary awards for matters that have been raised during the proceedings which have not been resolved in the Award.

In the event the parties reach a settlement during the arbitration proceedings, upon the request of the parties and acceptance of the arbitrator(s), the settlement can be made in the form of an award.

The retraction of arbitration, settlement of parties, lack of necessity or impossibility to continue proceedings, failure to pay the advance for costs of arbitration, or the arbitral award shall end the arbitration proceedings.


Arbitration costs and advance fees are subject to detailed provisions under the Rules. Special emphasis is made to payment of fees, costs and advance payments in the commencement of the arbitration and the termination of proceedings.

In principle, the parties shall equally bear the costs of arbitration proceedings. However, if an advance payment is not duly made, the proceedings shall be suspended, and the parties shall be so notified. If one of the parties fails to pay their share of advance payments, the other party may pay the necessary advance amount. The arbitral award shall be rendered to comprise the decision governing the costs of arbitration.

Expedited Arbitral Proceedings

One of the most prominent aspects of the ISTAC and the Rules is the emphasis made with respect to time effectiveness. Pursuant to the ISTAC rules on Expedited Arbitration, unless agreed to otherwise by the parties, total claims that do not exceed TRL 300,000 on the date of initiation of arbitration are subject to the rules on expedited arbitration proceedings.

The claimant shall directly submit its statement of claim and its appendices to the Secretariat in the initiation of arbitration. The respondent shall provide its statement of defense and its appendices within 15 days from receipt of documents related to the arbitration.

In principle, a sole arbitrator shall resolve disputes under expedited arbitrations. Unless agreed to the contrary, the parties shall jointly appoint the arbitrator, and upon the failure of which, the Court shall designate the sole arbitrator. A party objecting to the appointment of the sole arbitrator, or to the application of expedited arbitration rules to the current proceedings even prior to the appointment of the arbitrator, shall raise this objection with the Secretariat within a period of 5 days.

The expedited arbitration aims to shorten the duration of the arbitration proceedings as a whole, and not just the time periods in which the parties are subject to. Therefore, the expedited arbitration rules state that the sole arbitrator shall render his/her award within 3 months from delivery of the arbitration file to himself/herself. In fact, the award shall not be rendered later than one month commencing from the later date of the submission of the final written statement or the completion of the hearing.


The ISTAC Rules of Arbitration, which entered into force on October 2015, determines the scope of arbitration proceedings that will be conducted within the ISTAC. These Rules, which adopt the generally accepted practices and rules in international arbitration, are a set of rules easily acceptable to parties participating in an international arbitration.

In addition to complying with the present generally accepted practices, the ISTAC Rules of Arbitration also aim to cover the needs that arise in practice. The most important example of this is the aim of the Rules to conclude a dispute in the shortest time period possible. This is especially the predominant feature foreseen in the rules applicable to expedited arbitrations for claims that do not exceed TRL 300,000, and which require disputes to be resolved under an award, latest, within three months. The special emphasis made to time and cost-effectiveness in the Rules aims to resolve disputes swiftly, and with minimal costs.

The ISTAC Rules of Arbitration serve to establish an institutional arbitration that is independent, autonomous, and which is capable of competing internationally.


1. Resolution dated 29 September 2009 and no. 2009/31, published in the Official Gazette dated 2 October 2009 and No. 27364. See Newsletter article "Will Istanbul Become A Center For International Arbitration?" dated November 2009 http://www.erdem-erdem.com/en/articles/will-istanbul-become-a-center-for-international-arbitration/ (accessed on January 30, 2016).

2. See http://www.ifm.gov.tr/Shared%20Documents/Strategy%20and%20Action%20Plan%20for%20IFC%20Istanbul.pdf (accessed on January 30, 2016).

3. See http://www.ifm.gov.tr/Shared%20Documents/Strategy%20and%20Action%20Plan%20for%20IFC%20Istanbul.pdf (accessed on January 30, 2016).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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