International Arbitration Comparative Guide

1 Legal framework

1.1 What is the relevant legislation on arbitration in your jurisdiction? Are there any significant limitations on the scope of the statutory regime – for example, does it govern oral arbitration agreements?

Arbitration in Türkiye may be divided into two categories based on whether the underlying dispute:

• is a domestic matter (domestic arbitration); or
• involves foreign elements (international arbitration).

Each category is governed by a different set of rules.

The International Arbitration Law 4686 governs arbitrations with a foreign element in Türkiye. According to Article 1, the International Arbitration Law applies to all arbitrations if:

• "a dispute has foreign element"; and
• "the place of arbitration is determined to be in Türkiye".

Part 11 of the Code of Civil Procedure 6100 regulates domestic arbitration in Türkiye. Part 11 applies if:

• the arbitral tribunal has its seat in Türkiye; and
• the arbitration does not contain a foreign element by virtue of the International Arbitration Law.

The decisive moment at which the foreign element requirement must be satisfied is not explicitly regulated. According to Article 3 of the Private International and Procedural Law, which may be applied to arbitration in Türkiye by analogy, the decisive factor is the commencement of arbitration.

Turkish law does not recognise oral arbitration agreements. The arbitration agreement must be:

• in writing, signed by the parties; or
• confirmed in an exchange of correspondence (eg, emails, letters).

1.2 Does this legislation differentiate between domestic arbitration and international arbitration? If so, how is each defined?

The International Arbitration Law governs arbitrations with a foreign element in Türkiye. Under Article 2 of the International Arbitration Law, the legislature has broadly defined the 'foreign element' criterion, significantly expanding the law's scope of application. A foreign element may arise under either:

• the personal scope (ratione personae); or
• the subject-matter scope (ratione materiae).

Under the personal scope, the International Arbitration Law applies if at least one party to the arbitration agreement has its domicile, place of business or habitual residence abroad (Article 2). This determination focuses on the parties to the arbitration agreement, not the arbitration proceedings. Even if all parties are domiciled in Türkiye, the International Arbitration Law may still apply due to their shareholder structure. For instance, if a shareholder has brought foreign capital into Türkiye under the Foreign Direct Investment Law, the dispute is qualified as having a foreign element, irrespective of the capital amount.

Under the subject-matter scope, a foreign element exists if:

• the contract's obligations are primarily performed abroad;
• the most closely connected law is foreign; or
• the contract involves foreign financing or guarantees.

For example, if a foreign institution finances the underlying contract, the International Arbitration Law will apply, regardless of the parties' domicile or shareholder composition.

The International Arbitration Law also includes a catch-all provision (Article 2(4)), extending its application to disputes involving the cross-border movement of goods or capital. Notably, parties retain the discretion to opt into International Arbitration Law or apply Chapter 11 of the Code of Civil Procedure, expanding or limiting the legislative framework governing their arbitration.

1.3 Is the arbitration legislation in your jurisdiction based on the UNCITRAL Model Law on International Commercial Arbitration?

The International Arbitration Law is based on:

• the UNCITRAL Model Law 1976; and
• Chapter 12 of the Swiss Private International Law.

Similarly, the sections of the Code of Civil Procedure related to arbitration were prepared with reference to UNCITRAL. Therefore, the rules of international and domestic arbitration are quite similar, but not identical.

1.4 Are all provisions of the legislation in your jurisdiction mandatory?

Under Turkish law, arbitration rules are generally not mandatory and serve as default provisions, applying only in cases where the parties have not reached agreement on specific matters.

1.5 Are there any current plans to amend the arbitration legislation in your jurisdiction?

Currently, there is no draft law or agenda for any changes to the arbitration regulations. Although some necessary revisions have been discussed in the doctrine, this is solely limited to theoretical debate.

1.6 Is your jurisdiction a signatory to the New York Convention? If so, have any reservations been made?

Türkiye signed the New York Convention on 2 July 1992 and it entered into force on 25 September 1992. The convention has been in effect since then.

Türkiye has two reservations under the New York Convention:

• reciprocity, meaning that it applies only to arbitration awards made in other contracting states; and
• commercial disputes, meaning that it applies only to awards rendered in commercial matters.

Nevertheless, today, these two reservations have limited relevance. With regard to the reciprocity reservation, more than 150 countries have acceded to the New York Convention, leaving only a few states that are not parties to the convention. With regard to the commercial reservation, it is accepted that the meaning of the term 'commercial' should be construed in a very wide manner to cover the breadth of international arbitration agreements.

1.7 Is your jurisdiction a signatory to any other treaties relevant to arbitration?

Türkiye is a signatory to many treaties relevant to arbitration, including the following:

• Türkiye ratified the New York Convention on 2 July 1992 and it came into force on 30 September 1992.
• Türkiye is a party to the European Convention on International Commercial Arbitration 1961.
• Türkiye has signed the Washington Convention on the Settlement of Investment Disputes 1965.
• Türkiye has entered into many bilateral investment treaties and international investment agreements.
• Türkiye is a party to the Energy Charter Treaty.

Like all other countries that are party to the New York Convention, this convention is most commonly used by foreign parties applying to enforce a foreign award.

2 Arbitrability and restrictions on arbitration

2.1 How is it determined whether a dispute is arbitrable in your jurisdiction?

According to Article 1(4) of the International Arbitration Law and Article 408 of the Code of Civil Procedure, any cause of action "arising from rights in rem over immovable property or out of transactions not subject to the will of both parties" is not arbitrable. With this definition, both the International Arbitration Law and the Code of Civil Procedure endorse the widely used concept of 'the free disposition of the parties' when determining arbitrability under Turkish law.

The term 'freely disposable claim' has broad application, as it also includes non-monetary claims. However, this term requires the arbitrator to examine whether the claims are at the parties' 'free disposition', which:

• depends on the law governing the merits of the case (lex causae); and
• requires a conflict of laws analysis.

Therefore, in some cases, the arbitral tribunal may have to examine arbitrability under a law other than Turkish law.

Turkish law specifies only a few civil or commercial law claims which the parties are not free to dispose of. For instance:

• fundamental family law issues, such as divorce suits and paternity suits, are not subject to the free disposition of the parties;
• certain acts for registration or revisions in a public registry – for example, requests for a change in name, a declaration of disappearance or the grant of a patent – are not subject to the free disposition of the parties; and
• proceedings aimed at the invalidation of securities are not capable of settlement by arbitration.

2.2 Are there any restrictions on the choice of seat of arbitration for certain disputes?

The parties are free to choose Türkiye as the seat of arbitration. Neither the parties nor the subject matter of the dispute need have any connection with Türkiye or any particular city. No Turkish court may decline jurisdiction to grant judicial assistance on the grounds that the dispute allegedly lacks a sufficient territorial or material connection with the seat designated by the parties. Nor can the judicial authority seized to set aside the award invoke any considerations of forum non conveniens to decline jurisdiction.

The parties may agree on the seat of arbitration at any time, even:

• once a dispute in respect of a defined legal relationship has arisen; or
• while arbitral proceedings in relation to such dispute are already pending.

An agreement on the seat need not be express; it may also be tacit or implied from the conduct of the parties. Article 9(1) of the International Arbitration Law and Article 425(1) of the Code of Civil Procedure confirm the rule that the seat of the arbitration will be the place that the parties have designated by agreement.

3 Arbitration agreement

3.1 What are the validity requirements for an arbitration agreement in your jurisdiction?

Article 4(1) of the International Arbitration Law and Article 412 of the Code of Civil Procedure define an 'arbitration agreement' as "an agreement by the parties to submit to arbitration all or certain disputes".

For an arbitration agreement to be valid, the following conditions must be met:

• The parties to the arbitration agreement must have:
• • legal capacity;
  • the capacity to be a party; and
  • the capacity to act and to conduct arbitral proceedings.
• The dispute or legal relationship referred to in the arbitration agreement must be capable of settlement by arbitration,
• The parties must have reached consent on the essential content of the arbitration agreement, including:
• • the agreement of the parties to submit their dispute to arbitration; and
  • a description of the dispute or the legal relationship which is covered by the arbitration agreement.
• The arbitration agreement must have been concluded in the form specified by law – that is, in 'writing', by virtue of Article 4(2) of the International Arbitration Law or Article 412(3) of the Code of Civil Procedure.

3.2 Are there any provisions of legislation or any other legal sources in your jurisdiction concerning the separability of arbitration agreements?

Article 7(H)(1) of the International Arbitration Law and Article 422(1) of the Code of Civil Procedure recognise the arbitration clause in a main contract as a separable contract. In other words, the validity of an arbitration clause is not necessarily bound to that of the main contract and vice versa. Therefore, the illegality or termination of the main contract, in principle, does not affect the jurisdiction of an arbitration tribunal based on an arbitration clause contained in that contract. The obligation to resolve all disputes by arbitration continues even if the main obligation or indeed the contract expires or is vitiated.

3.3 Are there provisions on the seat and/or language of the arbitration if there is no agreement between the parties?

If the parties have not decided on the language of the arbitration before or after the commencement of arbitration, the tribunal will determine the language of the arbitration, pursuant to Article 8(A)(2) of the International Arbitration Law or Article 424 of the Code of Civil Procedure. The tribunal will take into account:

• the nationality of the parties; and
• the language of the documents which are related to the arbitration.

Generally, tribunals designate the language of the underlying contract as the language of the arbitration.

Similarly, the arbitral tribunal will determine the seat of arbitration if not decided by the parties before or after the commencement of arbitration proceedings. Pursuant to Article 9 of the International Arbitration Law and Article 425(1) of the Code of Civil Procedure, the arbitrators will designate a seat which they deem to be appropriate and most closely connected with the dispute.

4 Objections to jurisdiction

4.1 When must a party raise an objection to the jurisdiction of the tribunal and how can this objection be raised?

An arbitral tribunal does not normally examine whether it has jurisdiction ex officio, but only upon the invocation of a corresponding plea by the respondent. The parties may challenge the jurisdiction of the tribunal by raising an objection arguing that the arbitration agreement is null, void or incapable of being performed. This objection must be raised in a timely manner – that is, with the statement of defence at the latest, as prescribed by Article 7(H)(2) of the International Arbitration Law or Article 422(2) of the Code of Civil Procedure. The respondent is not obliged to provide detailed reasons for the plea; a general objection will suffice.

4.2 Can a tribunal rule on its own jurisdiction?

The competence-competence doctrine is expressly recognised under Article 7(H) of the International Arbitration Law for international arbitration and Article 422 of the Code of Civil Procedure for domestic arbitration.

4.3 Can a party apply to the courts of the seat for a ruling on the jurisdiction of the tribunal? In what circumstances?

Pursuant to Article 15(A)(1)(e) of the International Arbitration Law, parties may challenge an arbitral award before the competent national courts on the grounds of the tribunal's lack of jurisdiction. An arbitral award can be set aside due to lack of jurisdiction in three specific circumstances – that is, where the arbitrators:

• have decided on matters that are beyond the scope of the arbitration agreement;
• have failed to address the entirety of the claim; or
• have exceeded the authority granted to them.

5 The parties

5.1 Are there any restrictions on who can be a party to an arbitration agreement?

The requirements for being a party to the arbitration agreement are essentially the same as those for state court litigation. Each party involved the dispute must have:

• legal capacity;
• the capacity to be a party; and
• the capacity to act and to conduct legal proceedings.

The 'capacity to be a party' describes the ability (or right) to appear as a party in legal proceedings. It is a condition for the capacity to conduct legal proceedings in one's own name. The 'capacity to conduct legal proceedings' describes the ability (or right) to:

• manage proceedings directly as a party; or
• allow them to be managed by a designated representative, usually an attorney.

The capacity to conduct legal proceedings is a natural consequence, and thus a procedural aspect, of the capacity to act.

5.2 Are the parties under any duties in relation to the arbitration?

Under Turkish law, there are no specific provisions on the duties of the parties. However, most institutional arbitration rules requires the parties to conduct the arbitration in a cost and time-effective manner.

5.3 Are there any provisions of law which deal with multi-party disputes?

There are no explicit provisions on multi-party disputes under Turkish law. However, in our view, depending on the circumstances of the case, an international arbitral tribunal with its seat in Türkiye should be able to take inspiration from Articles 10 and 11 of the Istanbul Arbitration Centre Rules. Accordingly, it should be possible for arbitral proceedings to be conducted by or against a plurality of parties if they are bound only by several compatible arbitration agreements, as long as the claims are identical or factually related. This provision aims to promote efficient procedural solutions and avoid conflicting decisions. It allows several claims owned by or directed against several creditors or debtors to be joined and filed in one and the same request for arbitration.

In addition, a party to a pending arbitration may request the participation of a third party in the proceedings (third-party notice). Conversely, a third party may be interested in participating in the proceedings (intervention). The International Arbitration Law and Part 11 of the Code of Civil Procedure are silent on third-party notice or intervention. In our view, an arbitral tribunal with its seat in Türkiye may, on request, include the relevant third party or parties in the proceedings, taking into account all relevant circumstances. Following the concepts of Turkish civil procedure, the third party does not become a 'main party' to the proceedings, but merely an 'ancillary party'. For this reason, intervention and third-party notice are allowed before the Turkish courts regardless of whether the court has jurisdiction over the third party.

Lastly, a party to a pending arbitration may seek to bring a claim against a third party before the same arbitral tribunal – for example, in the form of a claim for an indemnity (third-party action). The International Arbitration Law and Part 11 of the Code of Civil Procedure are silent on these situations. In our view, the arbitral tribunal has jurisdiction to hear such claims only if:

• the third party is a party to the arbitration agreement between the parties to the pending arbitration; or
• a separate but compatible arbitration agreement exists between the third party and the party bringing the claim against it.

6 Applicable law issues

6.1 How is the law of the arbitration agreement determined in your jurisdiction?

The arbitral tribunal will determine the form and substance of an arbitration agreement by applying the relevant provisions of the law governing the arbitration (lex arbitri). An international arbitral tribunal with its seat in Türkiye is thus bound to apply Article 4 of the International Arbitration Law. This provision sets forth:

• a rule of substantive Turkish private international law governing the form of an arbitration agreement in Article 4(2); and
• a conflict of laws rule concerning the law governing the substance of the agreement to arbitrate in Article 4(3).

According to these provisions, the arbitration agreement must be made in writing and signed by the parties. Article 4(3) of the International Arbitration Law allows parties to choose the law governing the substance of the arbitration agreement. Under the International Arbitration Law, if no law is chosen to govern the arbitration agreement, the arbitration agreement will be considered valid if it is valid under Turkish law.

6.2 Will the tribunal uphold a party agreement as to the substantive law of the dispute? Where the substantive law is unclear, how will the tribunal determine what it should be?

In determining the law applicable to the substance of the dispute in arbitration, the parties' intent is given primary consideration, pursuant to Article 12(C) of the International Arbitration Law. The parties are free to choose the law that will govern the substance of the dispute. If the parties have not chosen the applicable law under the main contract, they may also choose the law applicable to their relationship through a completely independent agreement, separate from both the main contract and the arbitration agreement.

If the parties' choice of law cannot be clearly identified or if no law has been chosen, the arbitral tribunal will apply the law of the country with which the dispute is most closely connected.

7 Consolidation and third parties

7.1 Does the law in your jurisdiction permit consolidation of separate arbitrations into a single arbitration proceeding? Are there any conditions which apply to consolidation?

Under Turkish law, there are no specific provisions addressing the consolidation of separate arbitrations. If the procedural rules chosen by the parties include provisions regarding related actions or the joinder of claims, those rules will govern the arbitral tribunal's handling of such matters. However, in the absence of relevant provisions in the agreed procedural rules, the arbitral tribunal cannot unilaterally decide to hear related actions together. The consolidation of claims is possible only if requested by the parties.

7.2 Does the law in your jurisdiction permit the joinder of additional parties to an arbitration which has already commenced?

Under Turkish law, third parties that are not signatories to the arbitration agreement can participate in the arbitration proceedings as parties only if all parties to the arbitration agreement consent. Otherwise, their inclusion in the proceedings would exceed the arbitrators' authority and prevent enforcement of the arbitral award.

7.3 Does an arbitration agreement bind assignees or other third parties?

Under Turkish law, there are exceptions to the principle of the privity of contract. The first exception is succession. Turkish legal scholars and case law accept that an arbitration agreement also binds the legal successors of the contracting parties. This applies in relation to both legal succession and singular succession. Further exceptions to the rule include:

• arbitration agreements in favour of a third party; and
• the rare instances in which it may be justified in order to:
• • extend the scope of an arbitration agreement to a non-signatory; or
  • pierce the veil of a corporation in order to allow for a direct claim against its beneficial owners.

8 The tribunal

8.1 How is the tribunal appointed?

The overriding principle is that the arbitrators are appointed in accordance with the agreement of the parties. Where the parties have agreed on a panel of three arbitrators but have not determined the method for their appointment, the prevailing approach is that two of the arbitrators will be appointed by each of the parties and the two arbitrators so appointed will then unanimously select the third arbitrator as the president of the tribunal, pursuant to Article 7(A)(2) of the International Arbitration Law and Article 361(2) of the Code of Civil Procedure. However, the parties are free to agree otherwise – for example, that either the president or all members of the arbitral tribunal will be selected by an appointing authority of their choice. If a party fails to appoint its arbitrator or if the arbitrators appointed by the parties cannot agree on the president, the appointment will be made:

• by an appointing authority designated by the parties; or
• in the absence thereof, by the competent state court.

Where the parties have agreed on a sole arbitrator but have not determined the method for their appointment, the prevailing approach is for the parties to appoint the arbitrator jointly. However, the parties are free to agree in advance that no such attempt will be made and that the sole arbitrator will instead be appointed directly by an appointing authority. If the parties fail to agree on a joint appointment, pursuant to Article 7(2) of the International Arbitration Law and Article 416(2) of the Code of Civil Procedure, the sole arbitrator will be selected:

• by an appointing authority designated by the parties; or
• in the absence thereof, by the competent state court.

Where the parties have determined the arbitral procedure by reference to arbitration rules (eg, those of the International Chamber of Commerce, the London Court of International Arbitration, the Istanbul Arbitration Centre or UNCITRAL), this reference will include the provisions contained in such rules on the appointment of arbitrators.

8.2 Are there any requirements as to the number or qualification of arbitrators in your jurisdiction?

Under the Turkish lex arbitri, any person may act as an arbitrator. Notably, the Turkish lex arbitri does not specify that only Turkish nationals may act as arbitrators. Article 7(C) of the International Arbitration Law and Article 417(2) of the Code of Civil Procedure require only that an arbitrator be independent and impartial. In addition to the statutory requirements of independence and impartiality, the parties are free to agree on additional qualifications or the mandate of the arbitrators.

It is widely accepted that only natural persons can be appointed as arbitrators. Legal persons or partnerships are not eligible for this mandate. If the parties have designated a legal entity or a body of a legal entity in the arbitration agreement, there remains room for interpretation as to whether this designation refers to specific persons.

Additionally, parties may agree on the number of arbitrators to be appointed. According to the mandatory provisions of Turkish law:

• this number must be odd; and
• the procedure for appointment must not breach the equality of the parties.

8.3 Can an arbitrator be challenged in your jurisdiction? If so, on what basis? Are there any restrictions on the challenge of an arbitrator?

Once an arbitrator has been appointed or has been nominated for confirmation by an arbitral institution, they may be challenged by the parties, provided that grounds for challenge exist under:

• the agreement of the parties; or
• the applicable arbitration law.

Both Article 7(C)(2) of the International Arbitration Law and Article 417(2) of the Code of Civil Procedure essentially provide that any arbitrator can be challenged by the parties if:

• they do not meet the qualifications agreed between the parties;
• grounds for challenge exist under the rules of arbitration to which the parties have submitted; or
• circumstances exist that give rise to justifiable doubts as to the arbitrator's independence or impartiality.

In all cases, it is irrelevant whether the arbitrator to be challenged is:

• a party-appointed arbitrator;
• the sole arbitrator; or
• the president of the tribunal.

Article 7(D)(2) of the International Arbitration Law provides that any grounds for challenge must be notified to the arbitral tribunal and the other party within 30 days of the party challenging the appointment becoming aware of the potential grounds for challenge. Article 418(2) of the Code of Civil Procedure, by contrast, requires the parties to bring a challenge within two weeks (as opposed to 30 days).

8.4 If a challenge is successful, how is the arbitrator replaced?

If a challenge is successful, the arbitrator will be replaced by a new arbitrator, unless the arbitration agreement is deemed to have become inoperative as a result of the challenge. The substitute arbitrator must be appointed in accordance with the rules that applied to the appointment of the arbitrator being replaced, unless the parties have agreed otherwise.

In addition, as in any case where an arbitrator must be replaced during the course of the proceedings, it must be determined:

• whether certain procedural steps in which the replaced arbitrator has participated must be repeated; and
• which authority should decide on this issue.

8.5 What duties are imposed on arbitrators? Are these all imposed by legislation?

While the different sources prescribe different duties, it is commonly accepted that the most basic duty of arbitrators is to resolve the parties' dispute. This requires maintaining due process, which includes ensuring:

• impartiality and independence;
• jurisdiction; and
• equality of arms.

Another duty of the arbitrators is the general obligation to abide by the mandate conferred by the parties on the arbitrators.

8.6 What powers does an arbitrator have in relation to: (a) procedure, including evidence; (b) interim relief; (c) parties which do not comply with its orders; (d) issuing partial final awards; (e) the remedies it can grant in a final award and (f) interest?

(a) Procedure, including evidence?

Both the International Arbitration Law and Part 11 of the Code of Civil Procedure are based on the premise that the parties will determine the arbitral procedure. Only if they fail to do so will the arbitral tribunal determine the arbitral procedure to the extent necessary. In both domestic and international arbitration, the arbitral tribunal may do so either:

• directly by establishing the rules it deems appropriate itself; or
• indirectly by reference to rules of arbitration or a procedural law.

The arbitral tribunal will determine the arbitral procedure by way of procedural orders, which it may reconsider at any stage after consulting with the parties.

If the arbitral tribunal is composed of two or more arbitrators, all tribunal members must participate in the decision-making process. The determination of the arbitral procedure cannot be delegated to the presiding arbitrator, unless the parties so authorise.

(b) Interim relief?

Parties can apply to the state courts for interim relief during arbitration proceedings.

(c) Parties which do not comply with its orders?

Most arbitration rules provide that the arbitral tribunal will allocate the costs of the proceedings by taking into account the parties' conduct. In such cases, the arbitral tribunal may order the non-compliant party to cover all (or at least some) of the costs of the arbitration, even if that party ultimately prevails. In addition, if a party fails to comply with the arbitral tribunal's order to produce documents, the arbitral tribunal may draw adverse inferences from such refusal depending on the circumstances.

(d) Issuing partial final awards?

The arbitrator or the arbitral tribunal may render partial awards, unless otherwise agreed between the parties.

(e) The remedies it can grant in a final award?

The remedies available to the arbitral tribunal in the final award are those available under the law applicable to the dispute. There is nothing to restrict such remedies under the Turkish lex arbitri.

(f) Interest?

Awards of interest are both allowed and common practice. Restrictions with regard to interest are subject to the law that applies to the merits of the dispute. However, the award of an excessive amount of interest can be challenged before the Turkish courts by arguing that this is contrary to public order. Pursuant to the principle of a prudent businessperson, the Turkish courts will interpret this restriction narrowly if the transaction is commercial. However, for example, compound interest is prohibited under Turkish law, with a few exceptions, and it may be argued that an award of compound interest is also contrary to public order.

8.7 How may a tribunal seated in your jurisdiction proceed if a party does not participate in the arbitration?

If one of the parties fails to participate in the arbitration proceedings, the arbitration proceedings will continue notwithstanding, except where the claimant fails to submit a statement of claim.

Under Article 11 of the International Arbitration Law, if the claimant fails to submit a statement of claim within the prescribed timeframe without valid grounds, the arbitral tribunal will terminate the proceedings. However, if the respondent fails to submit the statement of defence within the prescribed timeframe, the arbitration will continue without deeming the respondent to have accepted the claimant's allegations.

If either party fails to attend the hearing or submit evidence, the arbitral tribunal will proceed with the arbitration and may render a decision based on the available evidence.

Throughout the proceedings, the non-participating party must be:

• notified of each stage of the proceedings; and
• given a reasonable chance to present its case.

8.8 Are arbitrators immune from liability?

There are no Turkish laws or rules granting an arbitrator immunity. Arbitrators may be liable for breach of their duties and the parties may not waive liability for gross negligence or wilful intent in advance.

9 The role of the court during an arbitration

9.1 Will the court in your jurisdiction stay proceedings and refer parties to arbitration if there is an arbitration agreement?

Despite the existence of a valid arbitration agreement between the parties, if one party applies to court for the resolution of the dispute, the other party may raise an arbitration objection. The party raising the arbitration objection must be a party to the arbitration agreement and the arbitration objection must be raised in the statement of defence (ie, as a preliminary objection). If the objection is granted, the court will dismiss the case on procedural grounds.

However, the court cannot dismiss the case on procedural grounds ex officio, taking the arbitration agreement into account. The failure of any party to raise an arbitration objection is considered an indication that the parties intend to resolve the dispute in the state courts.

9.2 Does the court in your jurisdiction have any powers in relation to an arbitration seated in your jurisdiction and/or seated outside your jurisdiction? What are these powers? Under what conditions are these powers exercised?

Despite the existence of an arbitration agreement between the parties, the following matters relating to the arbitration procedure may require recourse to the courts:

• the appointment of an arbitrator for a party that is unable to select one or the appointment of a third arbitrator pursuant to Article 7 of the International Arbitration Law, unless otherwise agreed by the parties;
• challenges to the appointment of an arbitrator under Article 7 of the International Arbitration Law, unless this authority has been delegated to an arbitration institution;
• requests for interim relief, provisional attachments or recording of evidence pursuant to Article 6 or Article 12 of the International Arbitration Law;
• requests for court assistance for the enforcement of interim relief awarded by the arbitral tribunal in case of non-compliance, under Article 6 of the International Arbitration Law;
• requests for court assistance with the collection of evidence, pursuant to Article 12 of the International Arbitration Law;
• extension of the arbitration period, pursuant to Article 10 of the International Arbitration Law;
• notification of the arbitral award to the parties through the court, pursuant to Article 14/A of the International Arbitration Law;
• preservation of the arbitral award, pursuant to Article 14/A of the International Arbitration Law; and
• requests to set aside an arbitral award, pursuant to Article 15 of the International Arbitration Law.

In such cases, the dispute itself is not referred to the court; rather, judicial assistance is sought in relation to specific procedural matters. Under the International Arbitration Law, court assistance can be sought only if the seat of arbitration is in Türkiye.

9.3 Can the parties exclude the court's powers by agreement?

In principle, the parties can exclude the court's powers by agreement.

10 Costs

10.1 How will the tribunal approach the issue of costs?

Under the International Arbitration Law and Part 11 of the Code of Civil Procedure, the calculation of costs is within the sole discretion of the arbitrators or the arbitral tribunal, unless otherwise agreed by the parties. According to Article 16(B) of the International Arbitration Law, the arbitration costs include:

• the arbitrators' fees;
• travel and other expenses of the arbitrators;
• fees to be paid to experts and other persons from whom the arbitrators request assistance;
• travel and other costs of witnesses, as approved by the arbitral tribunal;
• attorneys' fees to be determined by the arbitral tribunal, calculated according to the Minimum Attorney Fee Tariff, for the successful party's attorney;
• court fees for an application to the local courts according to the International Arbitration Law; and
• notification expenses.

Pursuant to Article 16(D) of the International Arbitration Law and Article 326 of the Code of Civil Procedure, unless otherwise agreed by the parties, the arbitration costs will be paid by the unsuccessful party. If both parties are partially successful, the arbitration expenses will be shared between the parties as determined by their success rate. Unless otherwise agreed, attorneys' fees that are part of the arbitration expenses to be borne by the unsuccessful party are subject to the yearly tariff determined by the Union of the Turkish Bar Association.

10.2 Are there any restrictions on what the parties can agree in terms of costs in an arbitration seated in your jurisdiction?

In the absence of an agreement by the parties, the arbitral tribunal will determine the items that should be included in the arbitration costs by reference to Article 16(B) of the International Arbitration Law and Article 441 of the Code of Civil Procedure. Accordingly, the arbitration costs will include:

• the fees of the arbitrators and the fees of the secretariat;
• travel and other expenses incurred by the arbitrators;
• the costs of (tribunal-appointed) expert advice and of any other assistance required by the arbitral tribunal (eg, costs relating to translation services, court reporters, an administrative secretary, site visits);
• travel and other expenses incurred by witnesses in connection with their witness statements and examinations, provided that these expenses have been approved by the arbitrators;
• attorneys' fees awarded to the winning party, which will be determined pursuant to the minimum tariff; and
• the costs of service of documents.

11 Funding

11.1 Is third-party funding permitted for arbitrations seated in your jurisdiction?

There is no legal framework that prohibits or directly regulates third-party funding in Türkiye. As a result, third-party funding is permitted.

12 Award

12.1 What procedural and substantive requirements must be met by an award?

Article 14 of the International Arbitration Law sets out the formal requirements that an arbitral award must meet. The award must include:

• the names, surnames, titles and addresses of:
• • the parties;
  • their representatives; and
  • their lawyers;
• the reasons on which the award is based, with their legal basis and, where a request for compensation has been made, the amount of compensation;
• the place of arbitration and the date of the award;
• the names, signatures and any dissenting opinions of the arbitral tribunal; and
• an indication that an action to set aside the award may be brought.

The International Arbitration Law requires that the award be signed by the arbitrators, either manually or via a secure electronic signature, to ensure its validity.

Additionally, Article 13(A) of the International Arbitration Law provides that tribunal decisions are to be made by majority vote unless the parties have expressly required unanimity in the arbitration agreement.

Pursuant to Article 14 of the International Arbitration Law on the substantive requirements for an arbitral award, tribunals must specify the reasons and legal basis upon which the award is based. The reasons for the award are the most important indicator of compliance with due process in proceedings under Turkish law.

12.2 Must the award be produced within a certain timeframe?

Unless otherwise agreed by the parties, the arbitrator or arbitral tribunal must render a decision on the substance of the dispute within one year, pursuant to Article 10 of the International Arbitration Law. This timeframe commences on the date of the arbitrator's appointment, if there is a sole arbitrator. If the tribunal consists of more than one arbitrator, the timeframe starts from the date on which the minutes of the tribunal's first meeting are prepared. However, this period can be extended by agreement between the parties. In case of disagreement between the parties, the court may extend this period upon the application of one of the parties. Extensions are not limited by number or duration.

13 Enforcement of awards

13.1 Are awards enforced in your jurisdiction? Under what procedure?

An arbitral award rendered by a tribunal seated in Türkiye is directly enforceable without any further need for enforcement proceedings before the state courts. The Turkish courts will enforce the award as if it were a final judgment of the Turkish courts.

However, a party seeking to enforce an arbitral award with a foreign element rendered by a tribunal seated in Türkiye must file a lawsuit before the state courts to obtain an enforceability certificate. Such a certificate will be granted if the set-aside action has been finally rejected on the merits. If no set-aside action was initiated within the prescribed timeframe, the state court will issue the enforceability certificate upon the expiry of that period, where a party has submitted a request to this effect.

A party that is seeking to enforce an international arbitral award rendered by a tribunal seated outside of Türkiye should file a lawsuit before the state courts for the recognition and enforcement of a foreign arbitration award. 'Enforcement' is a term used for awards containing a performance order, whereas 'recognition' is used for declaratory awards.

Article 61 of the International Private and Procedural Law 5718 specifies the documents which must be presented by an applicant when requesting the enforcement of a foreign arbitral award. This provision is identical to its counterpart in the New York Convention. Accordingly, the applicant should include following documents:

• the original or a duly certified copy of the arbitration agreement or arbitration clause;
• the original or a duly certified copy of the final and executable or binding arbitral award; and
• translations and duly certified copies of the above documents.

Pursuant to Article 60(2) of the International Private and Procedural Law, the court that has competence to hear the enforcement request is the court:

• at the place where the defendant resides; or
• in the absence of such place, at the place where the assets of the defendant are located.

14 Grounds for challenging an award

14.1 What are the grounds on which an award can be challenged, appealed or otherwise set aside in your jurisdiction?

The only remedy available against an arbitral award is a set-aside action. An arbitral award can be set aside in the following circumstances:

• The applicant can prove that:
• • one of the parties to the arbitration agreement is incompetent or the arbitration agreement is invalid:
  • • under the law that the parties have chosen to govern the agreement; or
    • if no such law has been chosen, under Turkish law;
  • the procedure for appointing the arbitrator or arbitral tribunal was not followed as specified in the parties' agreement or as prescribed by law;
  • the award was not issued within the arbitration period;
  • the arbitrator or arbitral tribunal ruled as to its jurisdiction in a way that is contrary to the law;
  • the arbitrator or arbitral tribunal:
  • • decided on a matter that is outside the scope of the arbitration agreement;
    • failed to make a decision on the entire claim; or
    • exceeded its jurisdiction;
  • the arbitration proceedings were not conducted in accordance with the agreements of the parties or, in the absence of such an agreement, in accordance with the provisions of Turkish law, and this non-compliance had a material impact on the substance of the decision; or
  • the principle of equality between the parties was not observed.
• The appellate court determines that:
• • the dispute subject to the arbitral award is not suitable for arbitration under Turkish law; or
  • the award is contrary to public order.

14.2 Are there are any time limits and/or other requirements to bring a challenge?

An award is immediately subject to challenge from its notification to the parties on all grounds for annulment listed in Article 15 of the International Arbitration Law or Article 439 of the Code of Civil Procedure. If the aggrieved party fails to challenge a partial award within 30 days of notification, any grounds for setting aside such partial award will be treated as having been irrevocably waived, which means that they can no longer be raised together with an action for annulment against any subsequent award.

14.3 Are parties permitted to exclude any rights of challenge or appeal?

Pursuant to Article 15(A)(5) of the International Arbitration Law, parties may waive their right to file a set-aside action, either partially or entirely. Parties whose place of residence or usual place of abode is outside of Türkiye may completely waive their right to file a set-aside action by:

• making a clear statement in the arbitration agreement; or
• subsequently agreeing to this in writing.

They may also waive their right to file an annulment action for one or more of the grounds mentioned above.

15 Confidentiality

15.1 Is arbitration seated in your jurisdiction confidential? Is a duty of confidentiality found in the arbitration legislation?

There are no specific regulations on the confidentiality of arbitration proceedings under Turkish law. Therefore, arbitration does not directly impose a confidentiality obligation on the parties. However, the scope of confidentiality can be determined in the arbitration agreement between the parties or through a separate agreement.

15.2 Are there any exceptions to confidentiality?

Although there are no specific regulations on confidentiality, it is accepted that arbitrators may issue a confidentiality order as a precaution under the International Arbitration Law.

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.