NEWS

WITH THE ISTANBUL ARBITRATION CENTRE COMMERCIAL ACTIVITES BETWEEN THE MIDDLE, CENTRAL ASIA AND EUROPE ARE SET TO RAPIDLY INCREASE


Introduction

Resolution of disputes by Arbitration has shown a remarkable increase in recent years worldwide. Due to this increase many countries researched alternative dispute resolution methods and made laws to utilise these methods. THE ISTANBUL ARBITRATION CENTRE CODE was published by Official Gazette on 29 November 2014. Turkey is now positioned alongside other major jurisdictions that offer international Arbitration. The law provides that Turkish and foreign companies can now solve commercial or industrial problems with each other through Arbitration. With this development, Turkey will compete with the most important international Arbitration Centres, it will create the bridge for trade relations between Central Asia, Europe and the Middle East

What is Arbitration?

Arbitration is a form of alternative dispute resolution (ADR), which ensures the resolution of disputes outside the courts. A third party reviews the evidence in the case and imposes a decision that is legally binding on both sides and enforceable in the courts. In order to utilise the benefits of Arbitration, parties must contractually agree to hold all existing or future disputes to Arbitration.

Advantages of Arbitration
Disputes resolved by Arbitration or alternative dispute resolution methods have many benefits:
- They are often more economic than taking a case to Court.
- Disputes can be solved in a timely manner.
- They are effective ways to solve disputes.
- They are legally binding and enforceable even when made abroad.
- Arbitrations are confidential between the parties.
- Expert opinions are used to get to the right result.

Are Arbitration decisions enforceable?
Arbitration decisions – even when made abroad – are enforceable and this is often easier than judicial enforcement of court decisions in many countries. The reason for this is the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards.

For which fields is Arbitration mostly used?
Arbitration is commonly used in the context of international commercial disputes. It is referenced as the right solution for the reasons of bringing fast, professional and economic consequences.

A necessary development
With its sights set on becoming the most important economic centre in its region, the establishment of the Arbitration Centre in Istanbul is a very useful and necessary development for Turkey. With Istanbul’s geopolitical situation across the Black Sea, in the Middle East and as the centre of the Balkans, the special position of the Arbitration Centre constitutes a bridge for investment flows and financial transactions, which is a remarkable advantage for Turkey.

What to pay attention to
To attain great success the priorities of the Arbitration Centre should be to assist the target audience and provide an appropriate service to the audience's expectations and needs. Furthermore an independent, transparent, well-equipped, and neutral mechanism in order to compete with other Arbitration Centres in the international arena must be guaranteed.

Content of the Law

What methods will be used at the Istanbul Arbitration Centre?

According to the Istanbul Central Arbitration Law Article 1, the field of application for the Istanbul Arbitration Centre has been identified as alternative dispute resolutions in general for disputes involving domestic and foreign elements.

What is the legal status of the Istanbul Arbitration Centre?

The Legislators made it clear in Article 2 of the Istanbul Arbitration Law, that the Arbitration Centre in Istanbul has legal personality.

What tasks does the Arbitration Centre have?

The Centre’s mission (as described in Article 4 of the Istanbul Central Arbitration Law) is described in several parts. It must determine the rules on Arbitration and alternative dispute resolution methods; it must execute the service and also make publicity and publications relating to the government. The Centre should promote scientific studies on this subject, and facilitate domestic cooperation with relevant individuals and institutions abroad.

What is the income of the Centre?

Article 15 of the Law makes clear that the fee in return for the services offered by the Centre will be the income of the Centre; although for the first two years the activities of the Centre will be paid by the Prime Minister's budget.

The Result

The long-awaited Istanbul Arbitration Centre Law entered into force on January 1st 2015, in doing so another important bridge between Central Asia and Europe was built, taking advantage of Turkey's economic position and geographic location. Because of this initiative international trade relations and investments are set to increase. It will now be possible to resolve financial conflicts quickly and efficiently in Istanbul. This will guarantee financial movement for the whole geographic area. For Turkish and foreign companies settling disputes will be more affordable and easier to obtain in the future. This development will allow trade relations to be longer lasting and more profitable.

Our Office can provide you with many years of experience to evaluate the advantages of Arbitration and how to best utilise the Arbitration Centre of Istanbul successfully. We can also help by drafting your contracts in to ensure you can make the best use of the Istanbul Arbitration Centre.