Arbitration seated in Turkey with a foreign element is governed by the International Arbitration Law (Law No. 4686). The arbitration agreement must be in writing, the only remedy against the award is an annulment action filed within 30 days before the regional court of appeal, and parties domiciled abroad may waive that action. Foreign awards are enforced by the civil courts under the New York Convention and Articles 60 to 63 of Law No. 5718.
Key takeaways
Foreign investors often prefer arbitration to Turkish state courts: the parties choose the arbitrators, the language and the procedure, and the award can be enforced in most countries. Türkiye has a modern arbitration framework based on the UNCITRAL Model Law and its own institution, the Istanbul Arbitration Centre (ISTAC). This guide explains which law applies, what an enforceable arbitration clause looks like, how awards are challenged and how a foreign award is enforced in Türkiye.
Türkiye has two parallel regimes.
| Question | International Arbitration Law (No. 4686) | Code of Civil Procedure (No. 6100) |
|---|---|---|
| Applies to | Disputes with a foreign element where the seat is Türkiye, or where the parties or the tribunal chose this law | Arbitration seated in Türkiye without a foreign element |
| Remedy against the award | Annulment action only | Annulment action only |
| Court for annulment | Regional court of appeal | Regional court of appeal of the seat |
| Time limit | 30 days from notification | One month from notification |
| Effect of filing | Enforcement of the award is stayed automatically | No automatic stay; a stay requires security |
Article 2 of Law No. 4686 defines a foreign element broadly. It exists, for example, where the parties have their domicile or place of business in different countries, where a shareholder of a party has brought foreign capital, where foreign loans or guarantees are needed to perform the contract, or where the contract involves the movement of capital or goods between countries. Most contracts with a foreign investor or a foreign counterparty therefore fall under Law No. 4686.
Law No. 4686 does not apply to disputes concerning rights in rem over immovable property in Türkiye, or to disputes that are not at the free disposal of the parties.
Article 4 of Law No. 4686 requires the arbitration agreement to be in writing. A signed document is enough, and so is an exchange of letters, faxes or electronic messages, or a reference in the main contract to a document that contains an arbitration clause. A clause also binds if one side claims a written arbitration agreement in its statement of claim and the other side does not object in its defence.
In practice, most disputes about arbitration clauses come from vague drafting. A clause should state at least:
Under Law No. 4686, the proceedings can be conducted in Turkish or in the official language of any state recognised by Türkiye. Our guide to the contracts a company needs in Türkiye covers the commercial side of drafting.
ISTAC was established by Law No. 6570, published in the Official Gazette on 29 November 2014, as an independent arbitration and mediation institution based in Istanbul. It administers both international and domestic cases under its own arbitration rules, which have applied since October 2015. Parties remain free to choose another institution or an ad hoc procedure; choosing ISTAC is a matter of cost, language and convenience rather than a legal requirement.
Asking a Turkish court for an interim injunction or an attachment before or during the arbitration does not breach the arbitration agreement (Article 6 of Law No. 4686). Unless the parties agreed otherwise, the tribunal itself can also order interim measures, but it cannot order measures that must be enforced by enforcement offices or other public authorities, or that bind third parties. In those cases the parties go to court.
Unless the parties agreed otherwise, the tribunal must render its award on the merits within one year. The period can be extended by agreement of the parties or, if they cannot agree, by the civil court of first instance on the application of one of them.
An award under Law No. 4686 cannot be appealed on the merits. The only remedy is an action for annulment under Article 15, filed within 30 days from the notification of the award or of a correction, interpretation or additional award. The action is heard by the regional court of appeal and, unless the court decides otherwise, on the file. Filing the action automatically stays the enforcement of the award.
The grounds for annulment are limited. The applicant must prove, for example, that a party lacked capacity or that the arbitration agreement is invalid, that the tribunal was not appointed as agreed, that the award was not rendered within the arbitration period, that the tribunal wrongly accepted or declined jurisdiction or exceeded its authority, that the procedure did not follow the parties' agreement and this affected the outcome, or that the parties were not treated equally. The court also annuls an award on its own initiative if the dispute was not arbitrable under Turkish law or the award is contrary to public policy. A wrong application of the substantive law is not, by itself, a ground for annulment.
Parties whose domicile or habitual residence is outside Türkiye can waive the right to bring an annulment action, fully or for specific grounds, by an express statement in the arbitration agreement or by a later written agreement. For a foreign investor this can make an award final more quickly, but it also removes a safeguard, so the decision should be taken deliberately when the contract is drafted.
Türkiye is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, with two reservations: it applies the Convention to awards made in the territory of another contracting state, and only to disputes considered commercial under Turkish law. The Turkish procedure is set out in Articles 60 to 63 of the Code on Private International and Procedural Law (Law No. 5718).
The court does not review the merits of the dispute. For most of the refusal grounds the burden of proof lies on the party resisting enforcement. Once enforcement is granted, the award is enforced through the enforcement offices like a Turkish judgment.
Many commercial money claims in Türkiye must go through mediation before a lawsuit can be filed in court. See our guide to mandatory mediation in commercial disputes. Where the parties have a valid arbitration agreement, the dispute goes to arbitration rather than to court, and the clause should say clearly whether any negotiation or mediation step must come first.
We draft and review arbitration clauses in shareholder, distribution, construction and investment contracts, represent clients in ISTAC and ad hoc proceedings, and handle annulment actions and the enforcement of foreign awards in Turkish courts. See our corporate and partnership law service and our page for investors in Türkiye. Contact us to describe the dispute and request information about the procedure and fees.
Yes. Arbitration seated in Türkiye is governed by the International Arbitration Law (Law No. 4686) or the Code of Civil Procedure, and Türkiye is a party to the New York Convention on foreign arbitral awards.
Under Law No. 4686, the annulment action must be filed within 30 days from notification of the award. For domestic arbitration under the Code of Civil Procedure the limit is one month.
Yes. A final or binding foreign award is enforced by the civil court of first instance under Articles 60 to 63 of Law No. 5718 and the New York Convention. The court does not review the merits and can refuse only on the limited grounds listed in the law.
Disputes concerning rights in rem over immovable property in Türkiye, such as ownership or mortgage rights, are excluded from Law No. 4686. Contractual disputes about a property transaction can still be arbitrable, depending on the claim.
The Istanbul Arbitration Centre, an independent institution established by Law No. 6570 that administers international and domestic arbitrations under its own rules.
