Turkish International Arbitartion Law, Law no. 4686, 2001
International Arbitration Law (Law No. 4686 of 21 June 2001) in Jan Paulsson (ed), International Handbook on Commercial Arbitration, (Kluwer Law International 1984 Last updated: March 2005 Supplement No. 43 ) pp. Annex I - 1 - Annex I - 14
Official Gazette of 5 July 2001 No. 24453
Chapter One. General Provisions
Purpose and scope
The purpose of this Law is to set forth the procedures and principles concerning international [commercial] arbitration.
This Law shall be applicable where a dispute has a foreign element and the place of arbitration is determined to be in Turkey or where the Law is chosen as the governing law [of arbitration] by arbitrating parties or their sole arbitrator or arbitral tribunal.
Articles 5 and 6 of this Law are applicable even if the place of arbitration is determined to be a place not in Turkey.
This Law shall not be applicable to disputes related to real rights concerning immovables and to disputes that are not within the parties' disposal.
This Law shall also be applicable to the resolution, through international arbitration, of disputes concerning concession contracts which are related to public services and which contain a foreign element in accordance with Law No. 4501 of 21 January 2000 concerning Principles That Shall Be Complied with When There Is Access to Arbitration for Disputes Arising from Concession Contracts.
The provisions of international conventions to which Turkey is a party are reserved.
The existence of any of the following circumstances demonstrates that the dispute has a foreign element and, under such circumstances, arbitration is considered as international:
The provisions of Law No. 4501 of 21 January 2000 are reserved.
Competent Court and Extent of Court Intervention
A reference to a court in this Law shall be the reference to the civil court of first instance (asliye hukuk mahkemesi) of the respondent's domicile, habitual residence or place of business; where none of these is in Turkey, to the Đstanbul Civil Court of First Instance (Đstanbul Asliye Hukuk Mahkemesi).
In matters concerning international arbitration, no court shall intervene except where so provided in this Law.
Chapter Two. Arbitration Agreement
Definition and Form
“Arbitration agreement” is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.
The arbitration agreement shall be in writing. An agreement is in writing if it is contained in a document signed by the parties or in an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement, or in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by another. The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement provided that the reference is such as to make that clause part of the contract.
The validity of the arbitration agreement is subject to the law agreed by the parties, failing such agreement to Turkish Law.
No objection could be made against the arbitration agreement by arguing that the underlying contract is invalid or that the arbitration agreement is related to a dispute, which has not yet arisen.
Objection as to arbitration before the court and agreement to arbitrate
If an action is brought before the court in a matter, which is the subject of an arbitration agreement, the respondent may make an objection as to the arbitration. The acceptance [or denial by the court] of that objection and disputes concerning the validity of the arbitration agreement are subject to the provisions of the Code of Civil Procedure concerning initial objections. If such objection is accepted, then the court shall dismiss the action on procedural grounds.
If the parties agree to arbitrate during the court proceedings, the case file shall be sent to the arbitral tribunal by the court.
Interim measures of protection and interim attachments
It is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection or an interim attachment and for a court to grant such measure or attachment.
Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order an interim measure of protection or an interim attachment during arbitral proceedings. The arbitral tribunal may require any party to provide appropriate security in connection with such measure or attachment. The arbitral tribunal shall not grant interim measures or interim attachments [a] that are required to be enforced through execution offices or to be executed through other official authorities or [b] that bind third parties.
If a party does not comply with the interim measure or attachment, the other party may request the assistance of the competent court for taking an interim measure of protection or an interim attachment. The competent court, if necessary, may hear [the case in question] through a substitute court.
The parties' right to make a request [for interim measures of protection or interim attachments to a court] in accordance with the Code of Civil Procedure and the Code of Execution is reserved.
Any decision of a court, with respect to interim measures of protection or interim attachments, that is given upon a request of a party prior to commencement of arbitration or during arbitral proceedings, shall automatically cease to have effect where the decision of the arbitral tribunal becomes enforceable or where the arbitral tribunal denies [to hear] the case in its decision.
Chapter Three. Appointment, Challenge, and Responsibility of Arbitral tribunal, Termination of its Duties and its Competence
Appointment, challenge, and responsibility of arbitral tribunal, termination of its duties and its competence
Where under an appointment procedure agreed upon by the parties
the appointment of the arbitral tribunal shall be made, upon a party request, by the civil court of first instance.
The civil court of first instance's decision given, if necessary, upon hearing the parties, shall be final. The court, in appointing an arbitrator, shall give due regard to:  any qualifications of the arbitrator that is contained in the agreement of the parties,  securing the appointment of an independent and impartial arbitrator, and  the principles as to: [i] in the case of appointment of the sole arbitrator [or the third arbitrator], the advisability of appointing an arbitrator of a nationality other than those of the parties, and [ii] in case of appointment of a panel of three arbitrators, the advisability of making sure that two of the arbitrators do not have the same nationality as any of the parties. In case of appointment of more than three arbitrators, the above principles shall also be applicable.
An arbitrator may be challenged if:  he does not possess the qualifications that were agreed to by the parties,  if there exists a reason for challenge in accordance with the arbitration procedure agreed by the parties, or  if the existing circumstances give rise to justifiable doubts as to his impartiality or independence.
A party who intends to challenge an arbitrator shall, within thirty days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstance that may give rise to a challenge, send a written statement of the reasons for the challenge to the arbitral tribunal.
A party who challenged one or more arbitrators before the arbitral tribunal shall provide its request and reasoning [for that purpose]. A party who becomes aware that the challenge is not successful may, within thirty days after having received notice of the decision rejecting the challenge, apply to the civil court of first instance for lifting such decision and removal of the arbitrator or the arbitrators.
A challenge to the [sole] arbitrator appointed, or all members of the arbitral tribunal, or a challenge to the number of arbitrators that may remove the decision-making majority of the tribunal, shall only be made to the civil court of first instance. The court's decision under this paragraph is final.
The arbitration will come to an end, if the court accepts the challenge to the [sole] arbitrator appointed, all members of the arbitral tribunal, or the part of the arbitral tribunal that may remove the decision-making majority. However, unless the arbitral tribunal is designated by name in the arbitration agreement, a new tribunal shall be appointed.
If a controversy remains concerning any ground with respect to the arbitrator's withdrawal from the office, any party may request the civil court of first instance to decide on the termination of the arbitrator's mandate. The decision [of the court] shall be final.
The arbitrator's withdrawal from his office or the acceptance of the other party of the termination of the arbitrator's mandate does not imply acceptance of the validity of any ground concerning the challenge.
The replacement of one or more arbitrators will not suspend the term of arbitration.
If, in the arbitration agreement, the arbitral tribunal is designated by name, upon the termination for any reason of the mandate of the whole arbitral tribunal or part of it that would remove the decision-making majority, the arbitration shall be terminated.
A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence. A party is not precluded from raising such a plea by the fact that he has appointed, or participated in the appointment of, an arbitrator.
A plea that the arbitral tribunal is exceeding the scope of its authority shall not be valid if it is not raised without undue delay.
The arbitral tribunal may, in either case, admit a later plea if it considers the delay justified.
The arbitral tribunal shall rule on an objection as to its jurisdiction as a preliminary question. If the arbitral tribunal considers itself competent then it shall proceed with arbitration and shall render its decision.
Chapter Four. Arbitration Procedure
Determination of the rules of procedure, equal treatment of parties and their representation
Place of arbitration
The parties or an arbitration institution chosen by the parties are free to determine the place of arbitration. Failing such agreement or determination, the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case. The arbitral tribunal may meet upon notification in advance to the parties at any place where the circumstances of the arbitration so require.
Commencement, term and language of arbitration, statement of claim and defence, terms of reference
In a case where a party has obtained an interim measure of protection or an interim attachment from a court, the party shall commence arbitration within thirty days from the date of the measure or attachment. Otherwise, the interim measure or the interim attachment shall automatically be lifted.
The term of arbitration may be extended, upon agreement of the parties, or, in case of failure, upon a party request, by the civil court of first instance Upon denial of the request, arbitration shall come to an end at the date of the expiry of the term of arbitration.
The court's decision shall be final.
The arbitral tribunal may order that any documentary evidence shall be accompanied by a translation into the language or languages used in the arbitration proceedings.
Unless otherwise agreed by the parties, either party may amend or supplement his claim or defence during the course of the arbitral proceedings, unless the arbitral tribunal considers it inappropriate to allow such amendment having regard to
the delay in making it or to whether or not it creates an unjust difficulty for the other party or to other circumstances. The claim or defence shall not be amended or supplemented so as to extend beyond the scope of the arbitration agreement.
The terms of reference may contain such particulars as the parties' names and titles, their addresses for notification during the arbitration, a summary of their claims or defences, their requests, explanations on the dispute in question, the names, surnames, titles, and addresses of the arbitrators, the place of arbitration, the term of arbitration, the commencement of the term, explanations as to the procedural law or rules applicable to the dispute, and whether or not the arbitrators are competent to act as amiable compositeur.
The terms of reference shall be signed by the arbitral tribunal and the parties.
Hearing and proceedings in writing, losing capacity to be a party, default of a party to participate in arbitral proceedings
The arbitral tribunal shall give sufficient advance notice to the parties concerning the date of any site-inspection, examination by an expert, or of any hearing and any meeting of the arbitral tribunal for the purposes of examining other evidence, and of the consequences of the failure to attend any inspection, examination, hearing or meeting.
All statements, documents or other information supplied to the arbitral tribunal by one party shall be communicated to the other party.
Expert appointment by arbitral tribunal, taking evidence, rules applicable to substance of dispute and settlement
Unless otherwise agreed by the parties, if a party so requests or if the arbitral tribunal considers it necessary, the expert shall, after delivery of his written or oral report, participate in a hearing where the parties have the opportunity to put questions to him and to present expert witnesses in order to testify on the points at issue.
Decision making by panel of arbitrators, termination of proceedings
However, certain issues concerning procedure may be decided by a presiding arbitrator, if so authorized by the parties or the members of the arbitral tribunal.
The mandate of the arbitral tribunal shall terminate with the termination of the arbitral proceedings, subject to the provisions of Article 14(B).
Form, content, correction and interpretation of award, additional award, written notification
Unless otherwise agreed by the parties, the arbitral tribunal may render [interim and] partial awards.
The arbitral award shall be notified to the parties by the sole arbitrator or the chairman of the arbitral tribunal.
The parties may request that the arbitral award shall be sent to the civil court of first instance provided that the relevant costs and charges are paid. Upon such request, the sole arbitrator or the chairman of the arbitral tribunal shall submit the award and the case file to the court and they shall be kept at the office of the clerk.
If the arbitral tribunal considers that, following the receipt of the other party's opinion, the request is justified, it shall make the correction of the material error or give the interpretation within thirty days of receipt of the request.
The arbitral tribunal may correct any material error on its own initiative within thirty days from the date of the award.
A party, with notice to the other party, may request, within thirty days of receipt of the award, the arbitral tribunal to make an additional award as to the claims presented in the arbitral proceedings but omitted from the award. If the arbitral tribunal considers the request to be justified, it shall make the additional award within sixty days.
The decision concerning the correction, interpretation and the additional award is notified to the parties and shall form part of the award.
If none of the above can be found after making a reasonable inquiry, a written communication is deemed to have been received if it is sent to the addressee's last known domicile, habitual residence, place of business or mailing address by registered letter or any other means which provides a record of the attempt to deliver it.
The communication is deemed to have been received on the day it is so delivered.
The provisions of this Article do not apply to communications in court proceedings.
Chapter Five. Recourse Against Arbitral Awards
Application for setting aside and arbitral award becoming enforceable
An arbitral award may be set aside:
In cases where an application for the setting aside of the award is made on the ground that the award contains matters beyond the scope of submission to arbitration, if the decisions on matters submitted to arbitration can be separated from those not so submitted only that part of the award which contains decisions on matters not submitted to arbitration may be set aside. The application for setting aside an award may be made within thirty days from the date of notification of an award or a decision on correction or interpretation or an additional award. This application shall automatically suspend the execution of the arbitral award.
The parties may, in part or in full, renounce the right to initiate an action for setting aside the award. A party whose domicile or habitual residence is not in Turkey may renounce that right completely in an express clause in the arbitration agreement or in writing, following the signature of the arbitration agreement. Alternatively, in the same manner, the parties may renounce the above right for one or more of the reasons as set forth above for setting aside the award [see Article 15A(2)(1), above].
The application for setting aside shall, unless the competent court requires otherwise, be decided upon examination of the case file.
The judgment on the application for setting aside the award may be appealed in accordance with the provisions of the Code of Civil Procedure, however, no request can be made for reconsideration of the judgment rendered at the appeal level. Any examination at the appeal level shall be limited to the grounds available for setting aside the award. The examination shall be given priority and shall be handled expeditiously.
In cases where:  the application for setting aside the award is accepted and no appeal is launched against the judgment concerning the acceptance, or  under the circumstances envisaged under sub-paragraphs 1(b), (d), (e), (f),
(g) and sub-paragraph 2(b) above, the parties, unless prior agreement exists, may appoint new arbitrators and re-determine a new term of arbitration. The parties may appoint their former arbitrators.
In cases where the term provided for the application for setting aside has elapsed or where the parties have renounced the right to initiate an action for setting aside, sub-paragraphs (A)2(a) and (b) above shall be automatically taken into consideration by the civil court of first instance for granting the certificate concerning the enforceability of the award. In such case, unless the court decides otherwise, the examination shall be made on the file.
Chapter 6. Costs of Arbitration
Fees of arbitrators, costs of proceedings, deposit of advance, payment of costs
The parties may determine those fees by making a reference to the established international rules or institutional arbitration rules.
If the parties and the arbitral tribunal cannot agree on the determination of the fees or if the arbitration agreement does not contain any provision concerning the determination of the fees or if no reference has been made by the parties in this respect to the established international rules or institutional arbitration rules, the fees of the arbitral tribunal shall be determined in accordance with the schedule of fees determined annually by the Ministry of Justice after the consultation with the relevant professional organizations, which are public establishments in nature.
Unless otherwise agreed by the parties, the fees of the chairman shall be calculated as ten percent more than the fee to be paid to each arbitrator.
No additional fees are payable for the correction or interpretation of the award or issuing an additional award.
If the advance is not paid within the period determined in an arbitral decision, the arbitral tribunal may suspend the proceedings.
If the advance is paid within thirty days from the notification to the parties of the suspension, the arbitral proceedings shall be continued; otherwise, the arbitration shall come to an end.
After the award is rendered, the arbitral tribunal shall provide to the parties a certificate stating where and how much of the advances deposited were spent and shall return any remaining balance of the advance to the party who paid it.
The award of the arbitral tribunal that terminates the arbitral proceedings or that settles the case shall also contain the costs of arbitration.
Chapter 7. Final Provisions
Repealed and inapplicable provisions
With respect to the matters regarding this Law, unless otherwise stated, the provisions of the Code of Civil Procedure shall not be applicable.
Article 5 of Law No. 4501 of 21 January 2000 concerning Principles That Shall Be Complied with When There Is Access to Arbitration for Disputes Arising from Concession Contracts is repealed.
Transitory Article 1
If the parties and the arbitral tribunal cannot agree on the fees of the arbitrators or the arbitration agreement does not contain any provision regarding the determination of the fees or the parties made no reference in respect of the fees to either internationally established rules or institutional arbitration rules, until the Ministry of Justice determines a fee schedule, the arbitrators' fees shall be assessed by the civil court of first instance by taking into account the nature of the dispute and the term of arbitration.
Entry in force
This Law enters into force on the date of its publication.
The provisions of this Law shall be implemented by the Council of Ministers.