Arbitration is widely used to resolve international and domestic commercial disputes involving Turkish companies, foreign investors, contractors, financial institutions, shareholders and commercial counterparties. However, the existence of a written arbitration agreement does not necessarily mean that every dispute connected with the underlying commercial relationship can legally be determined by arbitrators.

Before commencing arbitration, the parties must determine whether the subject matter of the dispute is capable of settlement by arbitration under Turkish law. This question is generally described as arbitrability.

Arbitrability concerns the limits imposed by a legal system on the types of disputes that private parties may remove from the jurisdiction of state courts and submit to private adjudication. An arbitration agreement may be formally valid, clearly drafted and signed by authorised representatives, but it will not give an arbitral tribunal jurisdiction over a matter that Turkish law regards as non-arbitrable.

Under Turkish law, the fundamental test is whether the dispute concerns rights over which the parties may freely dispose. Disputes concerning rights in rem over immovable property situated in Turkey are also expressly excluded from arbitration.

These restrictions appear in both International Arbitration Law No. 4686 and the domestic arbitration provisions of the Turkish Code of Civil Procedure No. 6100. The same issue may arise again when an award is challenged or when recognition and enforcement of a foreign arbitral award are requested in Turkey.

This article examines the arbitrability of commercial disputes under Turkish law, including contractual claims, real estate disputes, corporate and shareholder matters, insolvency, intellectual property, competition law, employment, consumer transactions, public contracts and disputes involving mandatory rules.

What Is Arbitrability?

Arbitrability determines whether a particular dispute may legally be decided by an arbitral tribunal rather than a national court.

Two different questions should be distinguished:

Subjective Arbitrability

Subjective arbitrability concerns whether a particular person or legal entity has the legal capacity and authority to enter into an arbitration agreement.

Relevant issues may include:

• The legal capacity of a natural person;
• The authority of a company representative;
• Restrictions applicable to public authorities;
• Corporate approval requirements;
• The ability of a state entity to agree to arbitration;
• The scope of a power of attorney.

Objective Arbitrability

Objective arbitrability concerns whether the subject matter of the dispute may be resolved through arbitration.

For example, two companies may possess full authority to sign an arbitration agreement. Nevertheless, their agreement cannot empower arbitrators to determine a matter that Turkish law reserves for state courts or public authorities.

In commercial practice, the expression “arbitrability” generally refers to objective arbitrability.

Legal Framework for Arbitrability in Turkey

The applicable statutory provision depends principally on whether the arbitration is international or domestic.

International Arbitration Law No. 4686

International Arbitration Law No. 4686 generally applies where the dispute contains a foreign element and Turkey is the seat of arbitration. It may also apply where the parties or the arbitral tribunal select its provisions under the circumstances permitted by the legislation.

Article 1 provides that the International Arbitration Law does not apply to:

• Disputes concerning rights in rem over immovable property situated in Turkey; or
• Disputes that are not subject to the will or free disposition of both parties.

The legislative justification confirms that these matters were deliberately placed outside the scope of international arbitration. It also explains that foreign-element public service concession disputes may be submitted to international arbitration under the relevant constitutional and statutory framework.

Turkish Code of Civil Procedure

Domestic arbitration is regulated by Articles 407 to 444 of the Turkish Code of Civil Procedure.

Article 408 provides that disputes arising from rights in rem over immovable property or matters that are not subject to the parties’ will are not arbitrable.

The language used in Article 408 substantially corresponds to the restriction under the International Arbitration Law. The same fundamental test therefore applies in both domestic and international arbitration: the parties must possess the legal power to dispose freely of the substantive right in dispute.

Foreign Arbitral Awards

Arbitrability is not relevant only at the beginning of the proceedings.

Under Article 62 of Law No. 5718 on Private International Law and International Civil Procedure, a Turkish court must refuse enforcement if the dispute decided by the foreign arbitral award could not be resolved through arbitration under Turkish law. The same statutory regime applies to recognition of foreign arbitral awards.

Article V(2)(a) of the New York Convention similarly permits the competent enforcement authority to refuse recognition and enforcement where the subject matter is not capable of settlement by arbitration under the law of the country in which enforcement is sought.

Accordingly, even where a dispute was regarded as arbitrable at the foreign seat, enforcement may still be refused in Turkey if the subject matter is non-arbitrable under Turkish law.

The Core Test: Can the Parties Freely Dispose of the Right?

The principal Turkish-law test is whether the parties may freely dispose of the right forming the subject matter of the dispute.

The question is not merely whether the relationship is commercial or whether the claim has a monetary value. A dispute may arise from a commercial transaction and still involve matters that the parties cannot determine through private agreement.

A right will ordinarily be regarded as disposable where its holder may lawfully:

• Waive the right;
• Settle the dispute;
• Release the opposing party;
• Accept partial performance;
• Modify the obligation;
• Transfer the claim;
• Agree on its financial consequences.

Commercial payment claims, contractual damages and price-adjustment disputes will usually satisfy this test because the parties may settle, waive or restructure those rights.

By contrast, a matter may be non-disposable where the requested decision:

• Determines a legal status applicable against everyone;
• Requires the exercise of sovereign authority;
• Creates or removes an official registration;
• directly affects persons who did not consent to arbitration;
• Concerns criminal or administrative sanctions;
• Produces collective legal consequences beyond the parties;
• Is reserved exclusively for a court or public authority.

The correct analysis therefore focuses on the nature of the right and the legal effect of the requested remedy, rather than solely on the title given to the claim.

Commercial Character Does Not Automatically Establish Arbitrability

Turkey applies the New York Convention subject to reciprocity and commercial reservations. The commercial reservation determines which foreign awards fall within Turkey’s application of the Convention. It does not mean that every commercially characterised dispute is automatically arbitrable.

A dispute must satisfy both requirements:

1. It must arise from a legal relationship considered commercial where that requirement is relevant; and
2. Its subject matter must be legally capable of settlement through arbitration.

The distinction is important. Bankruptcy proceedings, corporate-status decisions or administrative competition sanctions may arise from commercial activity, but their effects can extend beyond the private contractual relationship of the parties.

Contractual Commercial Disputes

Ordinary contractual commercial disputes are generally the most suitable category for arbitration.

Subject to transaction-specific limitations, the following claims will commonly be arbitrable:

• Unpaid purchase prices;
• Breach of supply agreements;
• Defective goods claims;
• Delay and disruption claims;
• Distribution and agency disputes;
• Franchise disputes;
• Banking and financing claims;
• Insurance and reinsurance disputes;
• Construction contract disputes;
• Energy supply disputes;
• Technology and software contract disputes;
• Licensing and royalty claims;
• Joint venture disputes;
• Breach of confidentiality;
• Contractual indemnity claims;
• Claims arising from merger and acquisition agreements.

The parties can ordinarily settle, waive or restructure these claims without obtaining approval from a state authority. Their resolution primarily produces effects between the parties rather than determining a legal status applicable against third parties.

However, arbitrability must be examined separately from the scope of the arbitration agreement. A dispute may be legally arbitrable but fall outside a narrowly drafted arbitration clause.

For example, a clause covering only “payment disputes under this agreement” may not necessarily extend to fraudulent misrepresentation, competition-law damages or obligations arising under a connected guarantee.

Claims Based on Mandatory Rules

The existence of mandatory Turkish legislation does not automatically make a dispute non-arbitrable.

Arbitrators may be required to apply mandatory rules when determining an otherwise arbitrable commercial dispute. The relevant distinction is between:

• A rule regulating the parties’ private rights and obligations; and
• A matter that Turkish law reserves for a court, regulator or public authority.

For example, a contractual claim may involve mandatory provisions concerning good faith, competition, foreign exchange, data protection or corporate law. The tribunal’s obligation to consider such rules does not necessarily remove the dispute from arbitration.

Arbitrability and public policy must also be distinguished. A dispute may be arbitrable, while a particular award may later face annulment or enforcement objections because its result allegedly violates Turkish public policy.

Real Estate Disputes

Turkish law expressly excludes disputes concerning rights in rem over immovable property situated in Turkey.

Rights in rem include legal rights that operate directly over the property and may be asserted against everyone. They include ownership, mortgage, usufruct, easement and certain other registered property rights.

Claims seeking the following relief will ordinarily fall outside arbitration:

• Cancellation of a land registry entry;
• Registration of ownership;
• Transfer of title through a decision having direct registry effect;
• Establishment or cancellation of a mortgage;
• Establishment or cancellation of an easement;
• Determination of ownership binding against third parties;
• Partition or dissolution of co-ownership where the decision directly affects title.

The reason is not merely that the dispute is connected with real estate. The decisive issue is that the requested award would directly establish, alter or cancel a right in rem over Turkish immovable property. Articles 1 of the International Arbitration Law and 408 of the Code of Civil Procedure contain an express restriction for this category.

Contractual Claims Connected with Real Estate

Not every dispute connected with immovable property is non-arbitrable.

Contractual claims concerning property may remain arbitrable where the tribunal is asked to determine personal obligations between the contracting parties rather than to alter the land registry directly.

Potentially arbitrable examples include:

• Payment of the purchase price;
• Contractual damages arising from a property sale;
• Construction costs;
• Delay damages;
• Rent payment disputes;
• Service charge disputes;
• Breach of a development agreement;
• Claims under a property management contract;
• Contractual obligations to execute documents;
• Compensation for failure to transfer property.

The distinction may become difficult where the claimant requests specific performance of a property-transfer obligation.

A tribunal may potentially determine that one party breached a contractual obligation to transfer property or award damages for that breach. However, an award purporting by itself to cancel a Turkish land registry entry and register ownership may encounter a direct arbitrability objection.

The arbitration clause and requested relief should therefore distinguish between contractual rights in personam and rights in rem.

Corporate and Shareholder Disputes

Corporate disputes require a claim-specific analysis.

Many disputes arising from shareholders’ agreements are contractual and may be arbitrable. Examples include:

• Breach of voting arrangements;
• Share-transfer restrictions;
• Call and put options;
• Drag-along and tag-along rights;
• Contractual dividend obligations;
• Deadlock mechanisms;
• Non-compete obligations;
• Representations and warranties;
• Indemnification following a share sale;
• Valuation and purchase-price adjustments.

These obligations arise primarily between the persons who signed the shareholders’ agreement. An arbitral award may determine whether a party breached the agreement and may award damages or other relief operating between those parties.

Greater difficulty arises where the requested decision affects the legal structure of the company or third parties who did not consent to arbitration.

Matters requiring careful analysis include:

• Annulment of general assembly resolutions;
• Declaration that a corporate resolution is null and void;
• Dissolution of a company;
• Removal or appointment of corporate organs;
• Compulsory amendments to the commercial registry;
• Actions affecting all shareholders;
• Claims producing effects against the company’s creditors;
• Questions concerning the company’s legal existence.

These proceedings may create effects extending beyond the parties to the arbitration agreement. They may also be governed by mandatory procedural rules and statutory time limits designed to protect the company, shareholders, creditors and commercial registry.

For this reason, parties should not assume that a broad shareholders’ agreement arbitration clause automatically authorises a tribunal to grant every corporate-law remedy.

A safer structure may distinguish contractual shareholder claims from statutory corporate-status remedies that must be pursued before the competent Turkish court.

Share Purchase and M&A Disputes

Disputes arising from share purchase agreements are ordinarily more readily arbitrable than disputes concerning corporate status.

Common arbitrable claims include:

• Breach of representations and warranties;
• Purchase-price adjustment;
• Earn-out disputes;
• Tax indemnities;
• Leakage claims;
• Non-compete breaches;
• Escrow releases;
• Failure to satisfy closing conditions;
• Claims concerning disclosure letters;
• Post-closing indemnification.

These claims usually concern financial and contractual obligations between the buyer, seller and any guarantors that agreed to arbitration.

However, an arbitral tribunal cannot be assumed to possess direct authority over a non-signatory company, commercial registry, tax authority or third-party shareholder.

The transaction documents should therefore be coordinated so that all necessary parties consent to compatible dispute resolution mechanisms.

Insolvency and Bankruptcy

Bankruptcy and collective insolvency proceedings present major arbitrability concerns.

A bankruptcy decision does not merely determine a private debt between two parties. It affects the debtor’s legal and financial status, creates consequences for all creditors and activates a collective statutory procedure administered under state authority.

For this reason, the opening of bankruptcy, administration of the bankruptcy estate, ranking of creditors and other collective insolvency measures are generally treated as matters that cannot be transferred entirely to private arbitrators.

An arbitration clause cannot ordinarily authorise a tribunal to declare a Turkish company bankrupt or conduct the collective liquidation of its assets.

Nevertheless, the contractual claim underlying a bankruptcy-related dispute may be arbitrable.

For example, an arbitral tribunal may potentially determine:

• Whether a contractual debt exists;
• The amount of the debt;
• Whether the debtor breached the contract;
• Whether damages are payable.

The subsequent use of that debt in bankruptcy or enforcement proceedings may remain subject to the exclusive procedures and authorities established by Turkish law.

This distinction between the private underlying claim and the collective insolvency consequence should be considered before commencing either arbitration or bankruptcy proceedings.

Intellectual Property Disputes

The arbitrability of intellectual property disputes depends heavily on the remedy requested.

Contractual intellectual property claims will often be arbitrable, including disputes concerning:

• Licence fees;
• Royalty calculations;
• Scope of a licence;
• Ownership obligations under a development contract;
• Confidentiality;
• Technology transfer;
• Software use;
• Distribution of branded products;
• Contractual infringement indemnities.

The parties can generally settle these contractual obligations and determine their financial consequences.

Greater difficulty arises where the claimant requests a ruling directly affecting an official intellectual property registration or a right operating against the public generally.

Claims seeking the cancellation, invalidation or registration of a Turkish patent, trademark or design may require action by the competent court or administrative authority because the resulting decision is intended to produce effects beyond the parties.

An arbitral tribunal may determine the contractual consequences of invalidity allegations between the parties, but the ability of its award to alter an official register directly is a separate issue.

Arbitration clauses in licensing and technology agreements should therefore state clearly whether the tribunal may decide validity arguments only as between the parties and what steps must be taken before the relevant registry or court.

Competition Law Disputes

Private competition-law claims may be capable of arbitration where they concern disposable civil and commercial consequences between the parties.

Examples may include:

• Contractual invalidity;
• Competition-law damages;
• Price-adjustment claims;
• Indemnification;
• Restrictions in distribution agreements;
• Non-compete obligations;
• Abuse-related contractual claims.

The fact that the tribunal must apply mandatory competition rules does not by itself make the private claim non-arbitrable.

However, arbitrators cannot replace the public enforcement powers of the Turkish Competition Authority.

The following matters remain fundamentally different from private contractual claims:

• Administrative investigations;
• Dawn raids;
• Regulatory information requests;
• Administrative monetary fines;
• Public enforcement decisions;
• Merger-control approval;
• Measures binding the market generally.

An arbitration clause cannot prevent the Competition Authority from exercising its statutory powers or require a tribunal to impose an administrative sanction on behalf of the state.

Parties should therefore distinguish private-law consequences, which may be determined in arbitration, from regulatory enforcement, which remains within public authority.

Employment Disputes

Employment disputes require particular caution because Turkish employment legislation contains mandatory protections designed for employees.

The validity of an arbitration agreement may be affected by:

• The time at which it was concluded;
• Whether the employee gave genuine and informed consent;
• Inequality of bargaining power;
• The type of claim;
• Mandatory jurisdictional rules;
• Whether statutory employment protections may be waived;
• Whether the clause attempts to prevent access to mandatory procedures.

An arbitration clause inserted unilaterally into a standard employment agreement may therefore face greater scrutiny than a negotiated post-dispute agreement.

Commercial parties should not assume that an arbitration clause used for supplier or shareholder disputes can be copied directly into an employment contract.

Employment-related arbitration should be assessed separately and in light of the employee’s statutory rights and the specific claim.

Consumer Disputes

Consumer transactions also involve protective mandatory rules and unequal bargaining power.

A pre-dispute arbitration clause contained in standard terms may face validity and fairness objections, particularly where it restricts the consumer’s access to statutory complaint mechanisms, consumer arbitration committees or consumer courts.

Relevant considerations may include:

• Whether the clause was individually negotiated;
• Whether the consumer received clear information;
• Whether the clause creates an unfair term;
• The value of the dispute;
• The cost of arbitration;
• The location and language of proceedings;
• Mandatory consumer jurisdiction rules.

Businesses should therefore avoid assuming that a general commercial arbitration clause is automatically enforceable against an individual consumer.

Tax and Administrative Disputes

Tax assessments, administrative fines and the validity of public administrative acts are generally not matters that private parties may determine conclusively by agreement.

An arbitral tribunal cannot ordinarily cancel a Turkish tax assessment, annul an administrative sanction or exercise the statutory authority of an administrative court.

A commercial contract may nevertheless contain tax-related indemnities that are arbitrable between the contracting parties.

For example, a share purchase agreement may provide that the seller will indemnify the buyer against specified pre-closing tax liabilities. An arbitral tribunal may determine the contractual indemnity obligation without cancelling or modifying the tax authority’s assessment.

The distinction is between:

• The public-law relationship between the taxpayer and the state; and
• The private contractual allocation of the economic consequences between commercial parties.

Public Contracts and Concession Agreements

The involvement of a public authority does not automatically make every contractual dispute non-arbitrable.

Article 125 of the Turkish Constitution permits disputes arising from public service concession conditions and contracts to be submitted to national or international arbitration. International arbitration may be selected only for disputes containing a foreign element.

International Arbitration Law No. 4686 similarly recognises that foreign-element disputes arising from public service concessions may be resolved through international arbitration under the legislation governing such arrangements.

However, the scope of consent, statutory authority of the public entity and character of the disputed act remain important.

A contractual payment or performance claim may be arbitrable, while a challenge seeking annulment of an independent regulatory or administrative decision may remain subject to administrative jurisdiction.

Criminal Matters

Criminal responsibility is not subject to private disposition.

An arbitration clause cannot authorise a tribunal to:

• Determine whether a criminal offence was committed for purposes of public prosecution;
• Convict or acquit a person;
• Impose imprisonment;
• Impose a criminal fine;
• Prevent prosecutors from investigating alleged criminal conduct.

However, the same factual conduct may produce separate civil and contractual consequences.

For example, allegations of fraud, bribery, embezzlement or forgery may be relevant to:

• Contract validity;
• Damages;
• Indemnification;
• Termination;
• Restitution.

An arbitral tribunal may need to examine such allegations for the limited purpose of determining the parties’ private rights. Its decision does not replace the criminal jurisdiction of Turkish authorities.

Family, Personal Status and Similar Matters

Although these matters ordinarily fall outside commercial arbitration, they illustrate the meaning of rights that are not subject to the parties’ free disposition.

Questions such as marriage, divorce, legal parentage, guardianship, legal capacity and personal status generally require decisions by competent public authorities or courts.

Commercial parties should recognise that the same principle may apply in business disputes where the requested award seeks to create a legal status affecting persons beyond the arbitration agreement.

Third-Party and Erga Omnes Effects

A central arbitrability concern arises where the requested relief would affect third parties.

Arbitration is based on consent. The tribunal’s jurisdiction ordinarily extends only to persons bound by the arbitration agreement.

The following remedies may therefore create difficulties:

• Altering an official registry;
• Affecting a non-signatory shareholder;
• Determining ownership against the world;
• Binding all creditors;
• Dissolving a company;
• Cancelling a public licence;
• Imposing obligations on a bank or public authority;
• Determining the status of a person or legal entity.

A monetary award operating only between the signatories is usually easier to reconcile with arbitration than a constitutive order intended to bind everyone.

When analysing arbitrability, counsel should ask not only what legal issue must be decided, but also who will be legally affected by the decision.

Who Determines Arbitrability?

The arbitral tribunal may rule on its own jurisdiction under the competence-competence principle. This includes objections concerning the existence, validity and scope of the arbitration agreement.

However, the tribunal does not have the final and exclusive word on objective arbitrability.

Turkish courts may examine arbitrability at several stages:

• When a party raises an arbitration objection before a Turkish court;
• During proceedings to set aside a Turkish-seated award;
• During issuance of an enforceability certificate;
• During recognition or enforcement of a foreign arbitral award.

The Code of Civil Procedure provides that a court must accept a timely arbitration objection and dismiss the case procedurally where the arbitration agreement is not invalid, ineffective or incapable of performance. This does not require the court to send a legally non-arbitrable matter to arbitration.

Arbitrability in Setting-Aside Proceedings

Where Turkey is the seat of an international arbitration, an award may be set aside if the dispute is not arbitrable under Turkish law.

The court examines this issue on its own motion. The losing party’s failure to raise the objection during arbitration does not necessarily prevent the court from examining objective arbitrability.

This reflects the public importance of the restriction. Parties cannot create arbitral jurisdiction over a legally non-arbitrable matter merely through agreement or silence.

Where only a separable part of the dispute is non-arbitrable, the possibility of partial annulment should be assessed.

Arbitrability during Recognition and Enforcement

A foreign award may also be refused recognition or enforcement if its subject matter cannot be resolved through arbitration under Turkish law.

Article 62 of Law No. 5718 expressly requires the Turkish court to reject enforcement where the dispute is not capable of resolution by arbitration under Turkish legislation. Recognition is subject to the same framework.

This means that an award may be valid at its foreign seat but remain unenforceable in Turkey.

Before commencing a foreign arbitration, the claimant should therefore identify where enforcement may ultimately be sought and examine the arbitrability rules of those jurisdictions.

Consequences of Non-Arbitrability

Where a dispute is non-arbitrable, several consequences may arise:

• The arbitration clause may be ineffective for that particular dispute;
• A Turkish court may reject an arbitration objection;
• The tribunal may decline jurisdiction;
• The award may be set aside;
• An enforceability certificate may be refused;
• Recognition or enforcement of a foreign award may be rejected;
• The parties may need to pursue the claim before the competent state court;
• Part of the proceedings may need to be separated from the arbitrable claims.

The entire arbitration agreement does not always become invalid merely because one type of remedy is non-arbitrable.

Where the claims and remedies can be separated, arbitrable contractual claims may remain before the tribunal while non-arbitrable matters are pursued in court.

However, parallel proceedings create risks of inconsistent findings, duplication and delay. The dispute resolution clause should anticipate these issues where possible.

Drafting Arbitration Clauses to Address Arbitrability

An arbitration clause should not simply state that “all disputes” will be arbitrated without considering statutory limitations.

For complex transactions, the clause may:

• Define the contractual disputes submitted to arbitration;
• Preserve court jurisdiction over non-arbitrable matters;
• Permit applications for registry-related relief;
• Address interim measures;
• Coordinate related contracts;
• Include all commercially relevant parties;
• Provide for consolidation or joinder;
• Distinguish contractual remedies from corporate-status remedies;
• Preserve applications before public authorities;
• Establish how parallel proceedings will be managed.

A clause may provide:

“Any dispute arising out of or relating to this agreement shall be finally resolved by arbitration, except to the extent that the subject matter is not capable of settlement by arbitration under the mandatory law applicable at the seat or in the jurisdiction where relief is sought. Nothing in this clause shall prevent a party from applying to a competent court or public authority for non-arbitrable, registry-related, regulatory or urgent protective relief.”

Such wording cannot make a non-arbitrable matter arbitrable. It can, however, reduce the risk that one non-arbitrable remedy will invalidate or disrupt the parties’ entire dispute resolution arrangement.

Practical Arbitrability Checklist

Before commencing arbitration, the parties should ask:

• What is the precise substantive right in dispute?
• Can the claimant legally waive or settle that right?
• Does the requested relief operate only between the parties?
• Would the award alter an official registry?
• Does the claim concern ownership of Turkish immovable property?
• Would the decision affect non-signatories?
• Does the claim require the exercise of public authority?
• Is the remedy collective, as in bankruptcy?
• Does a regulator or administrative court possess exclusive authority?
• Is the claim contractual or status-based?
• Can arbitrable and non-arbitrable claims be separated?
• Which law governs arbitrability at the seat?
• Where will the award be enforced?
• Could Turkish arbitrability rules prevent enforcement?
• Does the arbitration clause contain appropriate carve-outs?

This assessment should be made when drafting the contract and repeated after the dispute arises because arbitrability often depends on the specific remedy ultimately requested.

Frequently Asked Questions

Are all commercial disputes arbitrable in Turkey?

No. Commercial character is not sufficient by itself. The dispute must concern a right over which the parties may freely dispose and must not concern rights in rem over immovable property situated in Turkey.

Are payment and damages claims arbitrable?

Ordinary contractual payment and damages claims are generally arbitrable because the parties may settle, waive or modify those claims. The arbitration agreement must nevertheless cover the dispute.

Can a tribunal order the cancellation of a Turkish title deed?

A dispute seeking cancellation or alteration of a Turkish land registry entry directly concerns a right in rem and presents a clear statutory arbitrability restriction.

Are lease disputes arbitrable?

Contractual rent, service charge and breach claims may generally be distinguished from disputes directly determining ownership or another right in rem. Mandatory jurisdictional and protective rules applicable to the particular lease must still be examined.

Are shareholder disputes arbitrable?

Contractual claims arising from shareholders’ agreements are frequently capable of arbitration. Statutory claims affecting the company’s legal status, all shareholders, creditors or the commercial registry require separate and careful analysis.

Can an arbitral tribunal declare a company bankrupt?

Bankruptcy is a collective statutory process affecting all creditors and cannot ordinarily be administered or declared solely through private arbitration. An underlying contractual debt may still be capable of determination by arbitrators.

Are intellectual property disputes arbitrable?

Contractual licensing, royalty and technology disputes are generally more readily arbitrable. Claims seeking cancellation or alteration of an official registration may require court or administrative action.

Can competition-law claims be arbitrated?

Private contractual and damages consequences may be capable of arbitration. Administrative investigations, fines and regulatory enforcement remain within the powers of the Turkish Competition Authority and competent courts.

Does the tribunal decide its own jurisdiction?

Yes, the tribunal may determine its jurisdiction. However, Turkish courts may independently examine objective arbitrability during court proceedings, annulment or enforcement.

Can a foreign award be refused enforcement for non-arbitrability?

Yes. Article 62 of Law No. 5718 allows refusal where the subject matter cannot be resolved through arbitration under Turkish law.

Is non-arbitrability the same as public policy?

No. Arbitrability concerns whether the subject matter may be decided by arbitrators. Public policy concerns whether giving effect to the particular award would violate fundamental Turkish legal principles.

Can part of a dispute be arbitrable?

Yes. Contractual and monetary claims may sometimes be separated from status-based, registry-related, collective or regulatory remedies. The possibility of parallel proceedings and inconsistent outcomes must be managed carefully.

Conclusion

The arbitrability of commercial disputes under Turkish law depends primarily on the nature of the substantive right and the legal effect of the requested remedy.

International Arbitration Law No. 4686 and Article 408 of the Turkish Code of Civil Procedure establish two central restrictions. Disputes concerning rights in rem over immovable property situated in Turkey and disputes that are not subject to the parties’ free disposition cannot be resolved through arbitration.

Ordinary contractual payment, performance and damages claims will generally fall within the field of arbitration. Greater caution is required for disputes involving corporate status, company dissolution, bankruptcy, official registrations, intellectual property validity, public sanctions, tax assessments, employment protections and consumer rights.

The commercial label attached to a dispute is not decisive. A claim arising from a commercial relationship may still be non-arbitrable where the requested decision affects third parties, creates a legal status, requires state authority or produces consequences extending beyond the parties’ private relationship.

Arbitrability must also be examined at more than one stage. It may determine whether a Turkish court accepts an arbitration objection, whether an award is set aside and whether a foreign arbitral award is recognised or enforced in Turkey.

For this reason, parties should conduct an arbitrability analysis before signing the arbitration clause, before commencing proceedings and before selecting the remedies requested from the tribunal.

A carefully drafted dispute resolution clause should separate arbitrable contractual claims from non-arbitrable registry, status, regulatory or collective remedies. It should also address court assistance, parallel proceedings and the countries in which the eventual award may need to be enforced.

Where the transaction involves real estate, corporate control, insolvency, public authorities, regulated markets or rights affecting third parties, specialised Turkish-law advice should be obtained before relying on arbitration as the exclusive dispute resolution mechanism.

Legal Disclaimer: This article is provided for general informational purposes only and does not constitute legal advice. Arbitrability depends on the exact nature of the right, requested remedy, arbitration agreement, seat of arbitration, applicable law and intended enforcement jurisdiction. Transaction-specific legal advice should be obtained before commencing arbitration or seeking recognition and enforcement of an arbitral award.