Turkey: The Early Days Of The Istanbul Arbitration Centre

Arbitration analysis: The Istanbul Arbitration Centre (ISTAC) has been operational since October 2015. Okan Demirkan, partner at Kolcuoðlu Demirkan Koçaklý in Istanbul, explains that it is still early days for the institution and that a solid track record will play a significant role in convincing businesspeople throughout the region to embrace ISTAC arbitration as a sound method of dispute resolution.

What is the background of the ISTAC?

Until late 2009–early 2010, the idea of having an arbitration centre in Istanbul was not an agenda item in Turkey. Discussions surrounding the establishment of the Istanbul financial centre brought the issue to the fore when it was suggested that the financial centre should have an arbitration centre within it.

A draft law was subsequently prepared in 2010. This went through several changes until it entered into force on 1 January 2015. This law governs the purpose, structure and administration of ISTAC, and marks ISTAC's establishment. In May 2015, the first general assembly convened, ISTAC's board members were elected and Professor Ziya Akýncý became the institution's president. ISTAC officially started operating in October 2015.

Supported by all major Turkish professional bodies, chambers and regulatory authorities, ISTAC swiftly became the most widely discussed topic among Turkey's arbitration practitioners and, not long into ISTAC's tenure, in February 2016, the institution received its first arbitration. Reportedly, one of the parties to this dispute was from the Middle East. This has strengthened ISTAC's aspirations to compete with the Dubai International Arbitration Centre (DIAC) to become the Middle East's arbitration hub.

What are some of the key measures outlined in the ISTAC Arbitration Rules (ISTAC Rules)?

The ISTAC Rules have adopted types of procedures that can effectively speed-up an arbitration while decreasing costs. Furthermore, ISTAC has benefited from observing the experiences of the International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA) and the Swiss Chambers' Arbitration Institution (SCAI) in crafting a set of rules for an efficient arbitration.

The ISTAC Rules were introduced on 26 October 2015. Some of the key provisions are as follows:

  • the rights to a fair trial, cost-effective proceedings, confidentiality and good faith are the main principles of arbitration—arbitrators must abide by these principles while conducting the arbitration
  • the rights to a fair trial, cost-effective proceedings, confidentiality and good faith are the main principles of arbitration—arbitrators must abide by these principles while conducting the arbitration
  • unless otherwise agreed by the parties, if a party requires urgent legal protection and cannot wait for the appointment of arbitrators, that party can apply to the secretariat and request emergency arbitration in accordance with the emergency arbitrator rules
  • arbitrators must render a decision on the merits of the case within six months of the secretariat's confirmation of the terms of reference, and
  • an award must be rendered by a majority—parties are entitled to request amendment, interpretation or completion of an award within 30 days of its service

Keeping in line with modern arbitration practices and trends, ISTAC also offers the option of accelerated arbitration. According to the ISTAC Accelerated Arbitration Rules, unless otherwise agreed by the parties, accelerated arbitration is automatically available if the amount in dispute is less than TRY 300,000 (approximately US$ 100,000) on the date of the request for arbitration. However, even if the amount in dispute exceeds TRY 300,000, the parties are still entitled to request accelerated arbitration proceedings.

In accelerated arbitration, a party's answer must be submitted within 15 days of receiving a request for arbitration. Unless otherwise agreed by the parties, one arbitrator handles the case and renders a decision within one month following either the submission of the final petition or the hearing, whichever is later, and in any case, no later than three months after being assigned the case.

While these rules are a sign of ISTAC's commitment to providing a fair, cost-effective process, what ISTAC lacks at this stage is a solid track record. It has, after all, only been in operation since October 2015.

What is the likely impact of the institution/rules within the Middle East and more broadly within international arbitration?

It is too early to make a reliable forecast of ISTAC's impact internationally. In Turkey, however, the very fact of its existence has had an immediate impact—arbitration, as a method of dispute resolution, is becoming better known. Personally, I see ISTAC's establishment as a free marketing tool for the promotion of Turkish arbitration. Practitioners such as myself have welcomed the establishment of the institution as clients are now reading about arbitration and its possible advantages. Until recently, the concept of arbitration was only known to law firms and in-house counsel, but now more business people are becoming familiar with it.

Going forward, I would expect and hope that ISTAC will develop a reputation as a reliable institution in the Middle East. Needless to say, the extent to which this will be achieved will largely depend on the performances of Turkish lawyers and ISTAC itself. ISTAC's board is composed of very capable and reputable legal minds, who I know are dedicated to the institution's success.

At an international level, I hope that ISTAC's establishment will engender a more positive image of Turkey. In recent years, Turkey and the Turkish legal market have increasingly suffered from the poor image of the Turkish judiciary. The past few years, in particular, have worsened this image, thanks to a number of notorious decisions by local courts, both criminal and civil. It would be safe to say that a typical investor would not perceive Turkey as a country where justice is served to all. ISTAC's success will be a great tool towards at least diminishing that image of Turkey. There have been comments from ISTAC's board members proclaiming that ISTAC's mandate will be to 'distribute justice'. This is a bold stance to take, given Turkey's position in the world today, but one that creates a great challenge, which we can hopefully meet in the near future.

What does the future hold for ISTAC going forward?

Achieving an impressive track record will be crucial. I was recently informed that ISTAC has already received two pending arbitrations which is a great success, considering the institution's youth. It is expected that usage of ISTAC Rules is likely to become part of the template public tender contracts, governed by the public tender contracts law. This will pave the way for several disputes being resolved through ISTAC.

Furthermore, I heard that an ISTAC arbitration clause was already being used in a very important project contract in relation to the third airport of Istanbul, which is a multi-billion dollar project. This demonstrates the willingness of Turkish businesspeople to make use of ISTAC instead of other well-known institutions.

Thus far, the signs are good and the leadership of ISTAC, particularly Professor Akýncý as its president and General Secretary Dr Candan Yasan, have been doing a remarkable job in promoting the institution. However, we Turkish lawyers must encourage our clients to agree on ISTAC arbitration clauses if we want the institution to succeed.

Interviewed by Giverny Tattersfield.

© Kolcuoğlu Demirkan Koçaklı Attorneys at Law 2015

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.