ICC – INTERNATIONAL COURT OF ARBITRATION AND TURKEY - ONGUR&PARTNERS

BLOG

ICC – INTERNATIONAL COURT OF ARBITRATION AND TURKEY


Introduction

 

            Being one of the leading and most prominent arbitration systems, ICC - International Court of Arbitration preserves its traditional importance for the commercial world. In this regard, as an alternative to national litigation, International Court of Arbitration does not only provide “reliability” and “neutrality” but also offers flexible solutions which can meet the needs of the parties in the ever-changing nature of commercial life. According to publicly available data of 2017, the ICC – International Court of Arbitration has been the most preferred institution of arbitration with a share of 77%.[1]

 

            In line with this emerging importance for the world, ICC – International Court of Arbitration bears a special importance for Turkey as well. Increasing level of investment and international trade in Turkey, Turkish Arbitration experience became a very common way to resolve international disputes. Accordingly, Turkish Arbitration Lawyers and Attorney as well as foreign legal advisors preferred to define ICC arbitration mechanism as the dispute resolution institution for the high volume of the contracts. Additionally, Arbitration Lawyers and Attorneys became an important tool during the dispute resolution processes. Such that as per the statistics of 2017, Turkey has been listed as one of the “most frequent nationalities among parties with a share of 2,1%.[2] In other words, Turkish parties’ involvement with the ICC arbitration increases.

 

            In this paper, some important points regarding ICC – International Court of Arbitration will be highlighted and some recent developments regarding the procedure of ICC arbitration will be presented by referencing the publications of the ICC.

 

            - Changes in the Rules of Procedure

 

            In accordance with the emerging needs of the commercial life the International Court of Arbitration continues to reform its rules and procedure to provide an efficient process of arbitration.

 

            In this context, it is worth noting the last amendments made in 2017. As known, an amended set of Arbitration Rules entered into force on 1 March 2017 and the new “Expedited Procedure” has been introduced that applies to the disputes up to 2 million USD.

 

            - New offices

In addition to the new rules, Secretariat has also expanded its case management offices. In addition to the already established Hong Kong and New York offices, new offices have been established in Sao Paulo and Singapore. It is considered that, by this means the global reach of the ICC arbitration has been further strengthened.

 

            - Quality of the disputes

It is useful to present some statistical data regarding the quality of disputes that has been brought before the ICC – Court of Arbitration in order to understand its emerging importance.

 

                        * Sectors

            First of all, it is possible to observe that disputes from a wide range of sectors have been brought before ICC – Court of Arbitration. However in this wide spectrum, some sectors “ranging from agriculture to heavy industry and manufacturing, as well as public sector activities and service industries”[3].

 

            However it is also possible to note that some of them shine through. More specifically, disputes arising from construction (23%) and energy (19%) sectors constitute the 42% of the Courts caseload. Herein, it should be noted that, as energy and construction can be regarded as the leading sectors in Turkey, the importance of the ICC arbitration for Turkish businesses are even more than ever.

 

                        * Parties

            First of all it should be stated that ICC arbitration continues to be an efficient method of dispute resolution both for international and national disputes. Such that according to the figures of 2017, disputes between parties of the same region constitutes the 38% of the cases while disputes between parties of same nationality to 20%.[4]

 

            On the other hand another notable figure is that the presence of the states and state-owned parties are increasing. In more concrete terms, the number of the cases involving states or state-owned entities has been increased by 50% and has reached to a level of 15% in 2017.[5]

 

                        * Amounts

            As per the pending cases at the end of the 2017, it is possible to see that disputes below an amount of 5 million USD constitutes 36% of the pending cases while disputes above a value of 50 million USD constitute 24%.The average value of ICC cases pending at the end of 2017 was 137,325,630 USD. [6]

 

            It is expected that with lower arbitration fees and efficient procedures the “Expedited Procedure” is likely to make it possible for lower-value cases to be brought before ICC – Court of Arbitration.

 

            - Conclusion

            To sum up, the ICC – Court of Arbitration preserves its traditional place in the commercial life and orients itself with the changing nature of commercial and investment activities.

 

            In addition to this value, when we consider that Turkey is subject to important amounts of international investment and carry out big-scale construction and energy projects, the importance of the ICC arbitration is even more for Turkish businesses and state itself.

 

[1] ICC Dispute Resolution Bulletin 2018 Issue 2, page 52.

[2] ICC Dispute Resolution Bulletin 2018 Issue 2, page 53.

[3] ICC Dispute Resolution Bulletin 2018 Issue 2, page 61.

[4] ICC Dispute Resolution Bulletin 2018 Issue 2, page 55.

[5] ICC Dispute Resolution Bulletin 2018 Issue 2, page 55.

[6] ICC Dispute Resolution Bulletin 2018 Issue 2, page 62.