The foundation of the Istanbul Arbitration Centre (IAC), under law no. 6570, which entered into force on 1 January 2015, will contribute to Turkey’s competiveness among the world’s established and popular arbitration centres while providing an impartial, convenient and specialised solution for both domestic and international disputes.

To achieve this, Turkey has made significant progress in becoming more arbitration-friendly and making arbitration and ADR methods more accessible through legislative drafting. Of note is the International Arbitration Law (Law 4686), the main piece of legislation for international arbitration seated in Turkey. The Code of Civil Procedure (Law 6100) governing arbitration which does not have international nature and Mediation Law (Law 6325) which were drafted based on UNCITRAL Model Law.

Within this legislative framework, there are three institutional arbitration centres which currently provide services for arbitration on disputes of an international nature in Turkey: Istanbul Chamber of Commerce (ITO), Izmir Chamber of Commerce (IZTO) and the Union of Chambers and Commodity Exchanges of Turkey (TOBB). However, these institutions cannot respond to the needs of developing businesses due to an insufficient number of specialised arbitrators and a lack of publicity at both a domestic and international level.

Until the foundation of the IAC, there was a strong need for an institution where disputes of an international nature could be resolved, pursuant to international standards and with the involvement of specialised arbitrators. As deputy prime minister Ali Babacan announced in 2013, the IAC, predominantly led by actors from the private sector, is expected to be a strong alternative to the state courts, providing fast and accurate resolution of commercial disputes.

The IAC will provide arbitration and ADR services for all private disputes of both a foreign and domestic nature. The IAC is likely to be fully operational within one year as Law 6570 foresees approximately six months until the preparation and execution of the rules and principles governing arbitration proceedings.

Apr-Jun 2015 issue

Gün + Partners