Answer ... The arbitration rules and procedures in Turkey are regulated under Turkish Code of Civil Procedure numbered 6100 (“TCCP”) and Turkish Code of International Arbitration numbered 4686 (“TCIA”). The legislator prefers to make a distinction between domestic and international arbitration and regulates the domestic arbitration under TCCP whereas regulates the international arbitration is regulated under a separate code named TCIA. However, the both legislations are in compliance with UNCITRAL Model Law.
There are some mandatory provisions regulated in TCIA and an arbitration agreement is only valid if it is in writing. (Please see requirements explained under answer 10.)
Answer ... The Turkish legislator regulates domestic and international arbitration under different codes (Please see above under item 1) When relevant articles of TCCP and TCIA are analysed, "foreign element" is determinant whether a dispute has domestic or international characteristic. Pursuant to TCCP rules for arbitration, regulated between art.407-444, if the dispute does not contain foreign element as defined in TCIA and the seat of arbitration is designated as Turkey, the dispute considered as domestic and will be settled by the rules of TCCP whereas TCIA applies to a dispute which has a foreign element or where TCIA is chosen to be applied by the arbitrating parties or their sole arbitrator or arbitral tribunal.
As per art. 2 of TCIA, the following conditions are indicators for foreign element in a dispute and give a dispute international characteristic if;
- The domicile, habitual residence or places of business of the parties to the arbitration agreement are in different countries;
- The domicile, habitual residence or places of business of the parties to the arbitration agreement are in different countries than;
- The place of arbitration designated in the arbitration agreement or determined pursuant to the arbitration agreement; OR
- The place of performance of the substantial part of the obligations arising from the underlying contract or the place where the dispute has
the closest connection;
- At least one of the shareholders of the company party of the underlying contract constituting the basis of the arbitration agreement has brought foreign capital to Turkey pursuant to regulations for foreign capital encouragement or it is necessary to enter into credit and /or security contracts for the purpose of providing capital from abroad for the execution of this contract.
- In case the underlying contract or the legal relationship constituting the basis of the arbitration agreement causes the movement of capital or goods from one country to another.
Answer ... Both legislation regarding arbitration (TCCP and TCIA) are based on the UNCITRAL Model Law on International Commercial Arbitration.
Answer ... In general, TCIA aims party autonomy and give parties room to decide how to manage their arbitration procedure. Therefore, it is possible to say that all provisions of the TCIA is not mandatory.
Answer ... There are no current plans to amend arbitration legislation in Turkey.
Answer ... Turkey is a signatory to the New York Convention ("Convention") since 2 July 1992 and the Convention entered into force on 25 September 1992 in Turkey. Turkey made two reservations to the Convention: the reciprocity reservation and commercial reservation. Pursuant to these reservations, the Convention will be applied only for the awards granted in the territory of another contracting state and for the disputes regarded as commercial under Turkish law.
Answer ... Turkey is also a signatory to Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States and European Convention on International Commercial Arbitration.