Arbitration Regulations And Developments In Switzerland And Turkey: A Comparative Study

Introduction
In recent years, arbitration has become one of the most preferred methods for resolving commercial disputes both at the national and international level. Globalized trade and investment relations have increased the need for impartial, predictable, and specialized dispute resolution mechanisms. In this context, despite their different historical, economic, and legal traditions, both Turkey and Switzerland stand out as two important actors that regulate and implement arbitration law in a contemporary manner.

Switzerland has long been recognized as one of the safe harbors for international arbitration. cities such as Geneva and Zurich are among the most prominent international arbitration centers; the Swiss Federal Supreme Court's intervention in arbitration remains limited and predictable. The reform of the Federal Act on Private International Law (PILA), which entered into force in 2021, the 2023 corporate law amendments, and the 2024 update of the Swiss Arbitration Rules have consolidated the country's modernization process in arbitration.

Turkey, on the other hand, has established a modern arbitration framework with the 2001 International Arbitration Law, the 2011 Code of Civil Procedure, and the 2007 Private International Law and Procedure Act. The Istanbul Arbitration Centre (ISTAC), which began operations in 2015, has quickly become an important national and regional hub with its fast-track and emergency arbitrator rules. In recent years, the Court of Cassation's decisions have indicated a more arbitration-friendly approach, particularly regarding public policy and the validity of arbitration agreements.

The roles of both countries in investor–state arbitrations are also noteworthy. Switzerland is a party to the ICSID Convention and the Energy Charter Treaty and has been involved in dozens of international cases as the home state of investors. Turkey has signed more than 130 bilateral investment treaties (BITs) and has been party to numerous arbitration cases both as a host state and through its investors.

This study examines Swiss and Turkish arbitration law comparatively in light of recent developments, analyzing legislation, institutions, validity of arbitration agreements, arbitrability, annulment and enforcement of arbitral awards, and trends in investor–state arbitrations.

I. Legal Framework

A.Switzerland
Switzerland has long had a framework close to the UNCITRAL Model Law in the field of arbitration. The PILA reform that entered into force in 2021 modernized procedural rules, introduced electronic filing before the Federal Supreme Court, explicitly recognized the parties' freedom to choose the language of the proceedings, and simplified the procedures for applications to set aside arbitral awards.

In addition, amendments to the Swiss Code of Obligations in 2023 allowed joint-stock companies to insert arbitration clauses directly into their articles of association. This reform aimed to increase the use of arbitration in corporate disputes. The Swiss Federal Supreme Court, as the sole instance competent to hear applications related to arbitration, ensures a swift and predictable judicial practice.

B.Turkey
Turkey has adopted the dualist approach common in Europe, regulating domestic and international arbitration under different statutes. The International Arbitration Law applies to disputes with a foreign element, whereas the Code of Civil Procedure governs domestic arbitration. In addition, the Private International Law and Procedure Act regulates the recognition and enforcement of foreign arbitral awards as well as other aspects of private international law.

Turkey is a party to the 1958 New York Convention, applying it with a reciprocity reservation. Furthermore, Turkey signed the ICSID Convention in 1987 and ratified it in 1989. In recent years, the Court of Cassation has narrowed its interpretation of public policy, thereby enhancing the predictability of arbitration.

II. Arbitration Institutions

A. Swiss Arbitration Centre (SCAI)

Switzerland's leading arbitration institution is the Swiss Arbitration Centre, restructured in 2021. The arbitration rules known as the "Swiss Rules" were modernized through the 2021 and 2024 updates, introducing flexibility on matters such as electronic notifications, multi-party proceedings, joinder, and consolidation.

Geneva and Zurich continue to be preferred venues for international arbitration. Switzerland's neutrality, arbitration-friendly judiciary, and strong infrastructure consolidate its position as a regional arbitration hub.

B. Arbitration Institutions in Turkey

The best-known institution in Turkey is the Istanbul Arbitration Centre (ISTAC), which became operational in 2015. In 2024, 167 cases were filed, 87% of which were domestic and 13% international. Expedited procedure rules apply to disputes under 5 million TRY, with an award expected within three months.

Other institutions include the Istanbul Chamber of Commerce Arbitration and Mediation Centre (ITOTAM), the Turkish Bar Association Arbitration Centre, and the Organisation of Islamic Cooperation Arbitration Centre (OIC-AC), established in 2019. The 2023 OIC-AC Rules cover both commercial and investment disputes but do not serve as the forum for disputes arising under OIC investment agreements. Another significant arbitration institution is the UTAUM Global International Arbitration and Mediation Centre, which aims to resolve disputes quickly, effectively, and reliably at both the national and international levels. The Centre offers parties resolution before independent, impartial, and expert arbitrators in commercial disputes and provides both binding arbitral awards and amicable settlement options through mediation.

UTAUM has prepared its rules in accordance with international standards, taking into account, in particular, the UNCITRAL Arbitration Rules and other principles of international arbitration.

III. Validity of Arbitration Agreements

A.Switzerland
Swiss law requires arbitration agreements to be in writing, but also recognizes electronic records as valid. The principle of separability is firmly established in the case law of the Federal Supreme Court.

Moreover, the Court is known for its arbitration-friendly interpretive approach, upholding arbitration agreements even in cases of ambiguity, with a view to favoring arbitration.

B.Turkey
Turkish law likewise requires arbitration agreements to be in writing. The Court of Cassation demands that party consent be clear and definite. Historically, an important controversy in Turkey was whether arbitration clauses drafted in foreign languages were valid in light of Law No. 805 on the Mandatory Use of Turkish. Recent case law of the Court of Cassation has held that this law does not apply to contracts with a foreign element, thus confirming the validity of arbitration clauses in foreign languages. This marks an important step in reinforcing Turkey's arbitration-friendly stance.

IV. Arbitrability

Both countries accept that matters over which parties may freely dispose are arbitrable.

In Switzerland, disputes concerning rights in rem over immovable property are not arbitrable. However, disputes based on personal rights related to immovable property may be arbitrated.

In Turkey, debates on arbitrability have been more intense. The Court of Cassation has ruled that consumer disputes are non-arbitrable on public policy grounds. It has also held that disputes such as annulment of general assembly resolutions and dissolution of companies are not arbitrable. Nonetheless, in recent years, strong academic and practical opinions have emerged in favor of adopting a broader approach to arbitrability.

V. Annulment and Enforcement of Arbitral Awards

A.Switzerland
In Switzerland, the sole forum competent to hear annulment actions against arbitral awards is the Federal Supreme Court. Grounds for annulment are limited: violation of procedural fairness, lack of jurisdiction, and violation of public policy, among others. Due to the prohibition of révision au fond, the Court cannot review the merits of the award.

The Court's restrictive interpretation of public policy further strengthens Switzerland's arbitration-friendly image.

B.Turkey
In Turkey, the grounds for annulment of domestic and international arbitral awards are regulated in parallel with the UNCITRAL Model Law. However, Turkish courts have sometimes examined the merits of awards under the guise of public policy review.

With the 2018 amendment, annulment actions must be filed directly with regional courts of appeal instead of first-instance courts, which has expedited proceedings.

Regarding recognition and enforcement of foreign arbitral awards, the New York Convention is applied, with defenses such as public policy, lack of jurisdiction, and procedural irregularities being available. Recent rulings of the Court of Cassation have narrowed the scope of public policy and adopted an arbitration-friendly interpretation.

VI. Investor–State Arbitrations

A.Switzerland
Switzerland, being a party to ICSID and the Energy Charter Treaty, has been involved in numerous arbitration proceedings as the home state of investors. Swiss investors frequently bring arbitration claims particularly in the energy and natural resources sectors.

Switzerland's neutrality provides assurance to investors. Moreover, Swiss-based arbitration institutions are increasingly being chosen for investment disputes.

B.Turkey
Since its first BIT with Germany in 1962, Turkey has signed more than 130 investment treaties. Turkish investors have initiated numerous arbitration cases, particularly in Central Asia and the Middle East. Libya, Turkmenistan, and Russia are among the countries with the highest number of disputes involving Turkish investors.

On the respondent side, Turkey has mainly faced claims related to energy and infrastructure investments. As of 2025, in the 20 publicly known cases against Turkey, the majority have been resolved in favor of the state, with compensation awarded to investors being considerably lower than the amounts claimed. This demonstrates Turkey's strong performance in investor–state arbitrations.

VII. Comparative Assessment

Switzerland, with its long-standing arbitration tradition, predictable case law of the Federal Supreme Court, and international reputation, represents a "mature" arbitration hub. Turkey, by contrast, with its younger institutions and evolving jurisprudence, represents a "rising" hub.

Both countries are increasingly narrowing their interpretation of public policy and displaying arbitration-friendly tendencies. However, while Turkish courts have occasionally reviewed the merits of arbitral awards in practice, such review is categorically excluded in Switzerland.

In terms of institutions, Switzerland's international reputation is beyond dispute, while ISTAC's expedited procedure rules and practical solutions offer a competitive advantage for regional disputes.

Regarding investment arbitration, both countries are active participants. Swiss investors are more engaged in disputes arising from investments in developing countries, while Turkish investors are concentrated mainly in Central Asia and North Africa.

Conclusion
Despite their different legal systems and historical backgrounds, Turkey and Switzerland are converging in the field of arbitration. Switzerland, with its stability and neutrality, remains among the leading global arbitration hubs, while Turkey, with its modern legislation and institutions such as ISTAC, ITOTAM and UTAUM is rapidly advancing as a regional arbitration center.

The narrowing of the public policy exception, arbitration-friendly judicial tendencies, and active roles in investment arbitration demonstrate that, as of 2025, both countries hold significant positions in shaping the future of international arbitration.

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