Why Istanbul Is Becoming a Preferred Seat for International Commercial Disputes
1. Introduction
The selection of the seat of arbitration is among the most consequential decisions to be made when
drafting a dispute resolution clause. The seat determines the procedural law governing the
arbitration, the courts competent to support and supervise the proceedings, and the forum in which
an action for the setting aside of the award may be brought. Traditionally, parties to transactions
involving Türkiye and the surrounding regions have favoured established seats such as London,
Paris, Geneva and Stockholm. In recent years, however, Istanbul has emerged as an increasingly
credible alternative.
This article examines the legal and institutional framework underpinning arbitration in Istanbul,
the factors contributing to its growing appeal, and the matters to which parties should give
particular attention when designating Istanbul as the seat of arbitration.
2. The Legal Framework
Arbitration in Türkiye is governed by a dual regime. International arbitrations seated in Türkiye,
namely those involving a foreign element as defined by law, are governed by the International
Arbitration Law No. 4686 (the “IAL”), which was enacted in 2001 and is based on the UNCITRAL
Model Law on International Commercial Arbitration. Domestic arbitrations are governed by
Articles 407 to 444 of the Code of Civil Procedure No. 6100 (the “CCP”), which likewise reflect
the principles of the Model Law.
The IAL embodies the principal features of a modern arbitration law, including party autonomy in
the constitution of the tribunal and the conduct of the proceedings, the separability of the arbitration
agreement from the main contract, the competence of the tribunal to rule on its own jurisdiction,
and a limited and exhaustive list of grounds on which an award may be set aside. The IAL has
remained largely unchanged since its enactment, its most significant amendment having been
introduced by Law No. 7101 of 2018, which clarified, inter alia, the competent courts and the
procedure for court assistance in arbitral proceedings.
3. The Istanbul Arbitration Centre (ISTAC)
Emergency Arbitrator: A party in need of urgent interim relief prior to the constitution of
the tribunal may apply for the appointment of an emergency arbitrator, who is appointed
within a short period and is expected to render a decision within days.
Fast Track Procedure: Disputes below a specified monetary threshold, or disputes in
respect of which the parties so agree, are resolved by a sole arbitrator under an expedited
timetable.
Consolidation and Joinder: The Rules provide for the consolidation of related arbitrations
and the joinder of additional parties, which is of particular importance in multi-party and
multi-contract disputes such as those arising in the construction and energy sectors.
Arbitrator Independence: Arbitrators are required to submit declarations of acceptance,
availability, impartiality and independence, and the Centre maintains a roster of Turkish and
foreign arbitrators.
According to publicly reported figures, ISTAC received 263 new applications in 2025. While its
caseload remains predominantly domestic, it has increasingly extended into the energy and
construction sectors. At the same time, Turkish parties continue to feature prominently in
international arbitration more broadly: in 2025, Türkiye was reportedly the ninth most represented
nationality among parties in cases registered with the International Chamber of Commerce (ICC),
and the most represented in Central and South-East Europe.
4. Factors Contributing to the Appeal of Istanbul
Geographical and Commercial Position: Istanbul is located at the intersection of Europe,
Asia, the Middle East and Africa, and serves as a commercial hub for the Caucasus, Central
Asia and the Balkans. For parties from these regions, Istanbul offers a practical and, in many
cases, mutually acceptable neutral venue.
Cost Efficiency: The costs associated with conducting proceedings in Istanbul, including
hearing facilities, accommodation and local counsel fees, are generally lower than those
incurred in traditional Western European seats.
Freedom of Representation: The IAL permits foreign natural and legal persons to represent
parties in arbitral proceedings seated in Türkiye. Parties are therefore free to retain counsel
of their choice, irrespective of nationality, although applications to Turkish courts in
connection with the arbitration must be made through lawyers admitted in Türkiye.
Interim Relief: Pursuant to Article 6 of the IAL, the arbitral tribunal may, unless otherwise
agreed by the parties, order interim measures binding on the parties. In addition, a party may
apply to the competent court for interim relief before or during the arbitral proceedings, and
such application does not constitute a waiver of the arbitration agreement.
An Increasingly Supportive Judiciary: Recent decisions of the Turkish courts reflect a
supportive approach towards arbitration. In 2025, the Court of Cassation upheld the
enforcement of an ICC award rendered in Paris, declining to re-examine, under the heading
of public policy, allegations that had already been rejected by the tribunal and the court of
the seat. In February 2026, the Istanbul Regional Court of Appeal declined to revisit public
policy objections at the stage of issuing a certificate of enforceability. The courts have,
furthermore, increasingly treated objections raised only after an unfavourable outcome as
having been waived.
5. Recognition and Enforcement
Türkiye acceded to the 1958 New York Convention on the Recognition and Enforcement of
Foreign Arbitral Awards in 1992, subject to the reciprocity and commercial reservations.
Consequently, awards rendered in Istanbul are enforceable in the more than 170 contracting states
of the Convention, subject to the reservations made by the state in which enforcement is sought.
Türkiye has also been a contracting state to the ICSID Convention since 1989.
An award rendered in an international arbitration seated in Türkiye under the IAL is not subject to
a separate recognition procedure; it becomes enforceable upon the issuance of a certificate of
enforceability by the competent court. Recent appellate decisions have also confirmed that a foreign
arbitral award may serve as the basis for a provisional attachment of assets in Türkiye prior to the
completion of exequatur proceedings.
6. Matters Requiring Particular Attention
Notwithstanding the foregoing, parties designating Istanbul as the seat of arbitration should give
due consideration to the following matters:
Drafting of the Arbitration Clause: The Court of Cassation has consistently held that the
intention of the parties to arbitrate must be clear and unequivocal. Pathological clauses, such
as those referring to more than one dispute resolution mechanism in an inconsistent manner,
have been held invalid. It is therefore advisable to adopt the model clause recommended by
the chosen institution and to specify the seat, the number of arbitrators and the language of
the proceedings expressly.
Arbitrability: Disputes concerning rights in rem over immovable property situated in
Türkiye, as well as disputes arising from matters not subject to the free disposition of the
parties, are not arbitrable under the IAL.
Duration of the Proceedings: Under Article 10(B) of the IAL, the final award must be
rendered within one year from the constitution of the tribunal, unless otherwise agreed by
the parties or provided for under the applicable institutional rules. Parties should ensure that
the time limit is extended where necessary, as an award rendered after the expiry of the
applicable period may be exposed to an action for setting aside.
Setting Aside Proceedings: An action for setting aside must be filed within thirty days of
the notification of the award. Under the IAL, the filing of such an action automatically
suspends the enforcement of the award, which may delay the enforcement process.
Emergency Arbitrator Decisions: The IAL does not provide a clear mechanism for the
direct enforcement of decisions rendered by emergency arbitrators. Parties requiring
enforceable urgent relief may therefore need to apply to the competent Turkish courts.
7. Conclusion
Istanbul now offers parties a modern legal framework based on the UNCITRAL Model Law, a
dedicated arbitral institution with contemporary rules, freedom of representation, cost efficiency
and an increasingly arbitration-friendly judiciary, together with the global enforceability afforded
by the New York Convention. For parties with commercial ties to Türkiye and the surrounding
regions, Istanbul therefore merits serious consideration as a seat of arbitration. Careful drafting of
the arbitration clause, and an awareness of the particular features of Turkish law, remain essential
to ensuring that these advantages are fully realised.