Common Mistakes in International Arbitration Clauses Used in Turkish Contracts

International arbitration clauses are frequently inserted into commercial agreements involving Turkish companies, foreign investors, contractors, suppliers, shareholders, distributors and financial institutions.

A properly drafted arbitration clause can provide a neutral, efficient and internationally enforceable dispute-resolution framework. A poorly drafted clause can produce the opposite result.

Ambiguous or incomplete arbitration wording may lead to jurisdictional objections, parallel court proceedings, difficulties appointing arbitrators, increased legal costs, procedural delay, annulment proceedings and refusal of enforcement.

The problem is particularly serious because arbitration clauses are often negotiated at the end of a transaction. Commercial parties may devote substantial attention to price, payment, delivery, warranties, liability and termination while treating the dispute-resolution clause as standard boilerplate.

This approach is risky.

The arbitration agreement determines who will resolve the dispute, which disputes may be arbitrated, where the arbitration is legally seated, which procedural rules apply and whether the final award is capable of enforcement.

Under Turkish International Arbitration Law No. 4686, parties may agree to submit all or some disputes arising from an existing legal relationship to arbitration. The arbitration agreement may appear as a clause within the principal contract or as a separate agreement, but it must satisfy the statutory written-form requirement. Turkish law also recognises incorporation by reference where a contract refers to a document containing an arbitration clause with the intention of making that document part of the agreement.

This article examines the most common mistakes in international arbitration clauses used in Turkish contracts and explains how parties can reduce jurisdictional, procedural and enforcement risks.

Why Arbitration-Clause Drafting Matters

An arbitration clause may consist of only a few sentences, but those sentences establish the legal foundation of the entire arbitration.

The clause may determine:

• Whether arbitration is mandatory;
• Which parties are bound;
• Which disputes fall within the tribunal’s jurisdiction;
• Whether the proceedings are institutional or ad hoc;
• Which arbitration rules apply;
• The legal seat of arbitration;
• The number and appointment of arbitrators;
• The language of proceedings;
• The substantive governing law;
• Access to emergency and interim relief;
• Whether related disputes can be joined or consolidated.

A defect in one of these elements may not always invalidate the agreement. Courts and arbitral tribunals often attempt to preserve the parties’ intention to arbitrate.

However, the parties should not rely on a court or tribunal to repair an avoidable drafting error after a dispute arises. By that stage, each side may interpret the clause in the manner most favourable to its procedural position.

A short drafting review at the contract stage may prevent months of preliminary litigation.

Mistake 1: Using Optional Rather Than Mandatory Language

One of the most basic mistakes is using language that does not clearly require arbitration.

Problematic examples include:

• “The parties may refer disputes to arbitration.”
• “Disputes can be resolved by arbitration.”
• “The parties will consider arbitration.”
• “Any dispute may be submitted to arbitration if the parties agree.”
• “The parties may apply to arbitration or the competent courts.”

Such wording may be interpreted as permitting arbitration only if both parties provide further consent after the dispute arises.

That is rarely useful. Once a dispute exists, the party expecting an advantage in court may refuse to provide additional consent.

A mandatory clause should use clear language such as:

“Any dispute arising out of or in connection with this Agreement shall be finally resolved by arbitration.”

The official ISTAC model clause similarly states that disputes arising out of or connected with the contract shall be finally settled through arbitration under the Istanbul Arbitration Centre Arbitration Rules.

The words “shall be finally resolved” demonstrate that arbitration is compulsory and intended to replace litigation on the merits.

Mistake 2: Providing Simultaneously for Arbitration and State Courts

Some Turkish contracts contain both an arbitration clause and a jurisdiction clause without explaining how the two provisions interact.

For example:

“All disputes shall be resolved through arbitration in Istanbul. The courts and enforcement offices of Istanbul shall have exclusive jurisdiction.”

This wording creates uncertainty.

The reference to Istanbul courts may have been intended only for interim measures, enforcement or arbitration-related judicial assistance. However, the expression “exclusive jurisdiction” may suggest that the parties intended the merits to be decided by courts.

A dispute may then arise over which clause takes priority.

The contract should distinguish clearly between:

• The tribunal’s jurisdiction over the merits;
• The role of courts in granting interim protection;
• Court assistance with arbitrator appointment or evidence;
• Setting-aside proceedings;
• Recognition and enforcement.

A suitable clause may state:

“The merits of any dispute arising out of or relating to this Agreement shall be finally resolved by arbitration. Nothing in this clause prevents a party from applying to a competent court for interim or conservatory relief or for judicial assistance permitted by the law of the seat.”

Under Article 6 of Turkish International Arbitration Law, requesting an interim injunction or interim attachment from a court before or during arbitration does not conflict with the arbitration agreement.

Mistake 3: Naming the Arbitration Institution Incorrectly

Another common error is referring to an institution that does not exist or using an inaccurate combination of institutional names.

Problematic examples may include:

• “Istanbul International Arbitration Court”;
• “Turkish Chamber of Commerce Arbitration Centre”;
• “Istanbul Commercial Arbitration Board”;
• “ICC Arbitration Centre of Turkey”;
• “ISTAC Court of International Arbitration under ICC Rules.”

An institution may be able to administer the case despite a minor naming error if the parties’ intention is sufficiently clear. However, serious ambiguity can create disputes over whether the arbitration is institutional or ad hoc and which institution has authority to appoint the tribunal.

Parties choosing ISTAC should use its correct name:

Istanbul Arbitration Centre

The clause should refer expressly to the Istanbul Arbitration Centre Arbitration Rules. ISTAC’s official model wording provides a reliable starting point.

Parties selecting another institution should use the official model clause published by that institution rather than reconstructing its name or rules from memory.

Mistake 4: Combining Incompatible Arbitration Institutions and Rules

Some clauses name one institution but select the rules of another.

For example:

“The dispute shall be administered by ISTAC under the ICC Arbitration Rules.”

This creates uncertainty because institutional arbitration rules assign administrative powers to the institution identified in those rules. These powers may include:

• Registration of the case;
• Confirmation or appointment of arbitrators;
• Decisions on challenges;
• Determination of advances on costs;
• Administrative review;
• Emergency-arbitrator appointments.

The chosen institution may not be authorised or willing to administer another institution’s rules.

The clause should normally align the institution and its rules:

“The dispute shall be finally resolved by arbitration administered by the Istanbul Arbitration Centre in accordance with the ISTAC Arbitration Rules.”

Where the parties genuinely want ad hoc arbitration, they may use the UNCITRAL Arbitration Rules and identify a separate appointing authority where appropriate.

The distinction between institutional and ad hoc arbitration should be deliberate, not accidental.

Mistake 5: Confusing the Arbitration Institution with the Seat

The administering institution and the legal seat of arbitration are separate concepts.

The institution administers the case. The seat connects the arbitration to a national legal system.

For example:

• ISTAC may administer an arbitration seated in Istanbul;
• ISTAC may administer an arbitration seated in another country if the applicable framework permits;
• A foreign institution may administer an arbitration seated in Istanbul;
• An ad hoc arbitration may be seated in Türkiye without any institution.

The legal seat determines important matters such as:

• The procedural arbitration law;
• The courts having supervisory jurisdiction;
• The setting-aside forum;
• The territorial nationality of the award;
• Judicial support and intervention.

International Arbitration Law No. 4686 generally applies where the dispute contains a foreign element and Türkiye is selected as the seat, or where the law is otherwise selected under its scope. The law also permits parties or their chosen institution to determine the seat.

A clause stating only “arbitration shall take place at ISTAC” does not necessarily identify the legal seat clearly.

The clause should state:

“The seat of arbitration shall be Istanbul, Türkiye.”

ISTAC’s official model-clause guidance separately invites parties to specify the place of arbitration, confirming that institutional selection alone does not replace the seat designation.

Mistake 6: Confusing the Seat with the Hearing Venue

The seat is a legal concept. The hearing venue is a physical or virtual location.

A tribunal seated in Istanbul may hold an evidentiary hearing in London, Ankara, Dubai or through video conference. This does not ordinarily change the legal seat.

Turkish International Arbitration Law expressly permits the tribunal to meet elsewhere where the proceedings require, provided that the parties are notified.

A clause should therefore avoid wording such as:

“The arbitration will be held in Istanbul or another place selected by the tribunal.”

This may create uncertainty over whether “held” refers to the legal seat or merely the hearing location.

A clearer formulation is:

“The seat of arbitration shall be Istanbul, Türkiye. Hearings and procedural meetings may be held physically or remotely at any location determined by the tribunal after consulting the parties.”

Mistake 7: Failing to Specify the Seat

Where the parties do not determine the seat, the applicable rules or tribunal may be able to determine it.

Turkish law provides that, in the absence of agreement, the tribunal may determine the seat according to the circumstances of the case.

Nevertheless, leaving the seat open can create uncertainty at the most sensitive stage of the proceedings.

Before the tribunal is constituted, the parties may disagree about:

• Which country’s arbitration law applies;
• Which court may appoint an arbitrator;
• Where interim protection should be sought;
• Which court may hear an annulment action;
• Whether the arbitration is domestic or international.

The seat should therefore be agreed in the contract whenever possible.

Mistake 8: Failing to Distinguish the Governing Law of the Contract from the Law of the Arbitration Agreement

An international transaction may involve at least three different laws:

1. The law governing the substantive contract;
2. The law governing the arbitration agreement;
3. The procedural law of the arbitral seat.

These laws may be the same, but they do not have to be.

A clause stating:

“This contract is governed by Turkish law, and disputes shall be arbitrated in Paris.”

selects Turkish law for the principal contract and France as the arbitral seat. It does not necessarily state expressly which law governs the arbitration agreement.

This issue can become important where one party alleges:

• Lack of consent;
• Invalid incorporation;
• Unauthorised signature;
• Non-arbitrability;
• Termination of the arbitration clause;
• Extension of the clause to a non-signatory.

Article 4 of Turkish International Arbitration Law states that the arbitration agreement is valid if it complies with the law selected specifically for the arbitration agreement or, where no such choice exists, Turkish law. It also recognises the separability of the arbitration clause from the principal contract.

For greater certainty, the parties may state:

“This Agreement shall be governed by Turkish law. The arbitration agreement contained in this clause shall also be governed by Turkish law.”

This avoids an unnecessary conflict-of-laws dispute.

Mistake 9: Using an Arbitration Clause That Is Too Narrow

A clause covering only “disputes concerning payment” may exclude other claims arising from the same relationship.

Possible excluded claims may include:

• Misrepresentation;
• Invalidity;
• Termination;
• Confidentiality;
• Non-compete obligations;
• Product defects;
• Indemnities;
• Unjust enrichment;
• Tort-based claims;
• Post-contract obligations.

A narrow clause may force the parties to conduct parallel arbitration and court proceedings.

Broader wording is usually preferable in commercial contracts:

“Any dispute, controversy or claim arising out of or relating to this Agreement, including its formation, existence, validity, interpretation, performance, breach, termination or consequences of termination, shall be finally resolved by arbitration.”

The wording “arising out of or relating to” generally provides broader coverage than a clause referring only to disputes “under” the contract.

However, the parties may intentionally exclude particular issues. Any exclusion should be stated precisely.

Mistake 10: Attempting to Arbitrate Non-Arbitrable Matters

The parties’ consent cannot make every dispute arbitrable.

Under Turkish International Arbitration Law, disputes concerning rights in rem over immovable property situated in Türkiye and disputes that are not subject to the parties’ free disposition fall outside the statute’s arbitration framework.

Additional difficulties may arise in matters involving:

• Corporate status;
• Bankruptcy and collective insolvency;
• Administrative sanctions;
• Criminal responsibility;
• Certain employment disputes;
• Consumer protections;
• Official registries;
• Public regulatory powers.

For example, parties may arbitrate a contractual damages claim arising from a failed property transaction. They should not assume that a tribunal may directly cancel a Turkish title-deed registration.

Similarly, shareholders may arbitrate contractual obligations contained in a shareholders’ agreement. A statutory claim seeking a constitutive corporate judgment binding all shareholders and the commercial registry may require separate analysis.

The clause should include an appropriate carve-out:

“Matters that are not legally capable of settlement by arbitration under the mandatory law applicable to the dispute shall be determined by the court or authority having mandatory jurisdiction.”

Mistake 11: Failing to Satisfy the Written-Form Requirement

Turkish law requires the arbitration agreement to be in writing.

The requirement may be satisfied through:

• A signed written contract;
• Exchanged letters or electronic communications;
• An electronic record;
• An uncontested allegation of a written arbitration agreement in the parties’ pleadings;
• Valid incorporation by reference.

Problems may arise where:

• The arbitration clause appears only in an unsigned draft;
• Standard terms were never delivered;
• A purchase order refers vaguely to “our conditions”;
• The principal contract does not identify the incorporated document;
• Different versions of the standard terms exist;
• The signatory lacked authority;
• Only one party signed the relevant annex.

Businesses should preserve evidence showing that the clause was communicated and accepted.

Mistake 12: Defective Incorporation by Reference

Commercial contracts often refer to general conditions, framework agreements, charterparties, FIDIC forms, purchase conditions or other documents containing an arbitration clause.

Turkish law recognises incorporation by reference where the contract refers to a document containing an arbitration clause for the purpose of making it part of the agreement.

A vague reference may be insufficient.

Problematic wording includes:

“The seller’s usual terms apply.”

Better wording is:

“The Seller’s General Terms and Conditions dated 1 June 2026, including the arbitration agreement contained in Article 18, are incorporated into and form an integral part of this Agreement.”

The referenced terms should be provided to the other party before or at contract formation.

Mistake 13: Ignoring the Battle of Forms

In international sales and supply relationships, both parties may attempt to impose their own standard terms.

The buyer’s purchase order may provide for Turkish courts. The seller’s confirmation may provide for arbitration.

The parties then perform the transaction without resolving the inconsistency.

When a dispute arises, the tribunal or court must determine:

• Whether an arbitration agreement was concluded;
• Which standard terms prevailed;
• Whether performance constituted acceptance;
• Whether the conflicting dispute clauses cancelled each other.

The safest approach is to include the agreed arbitration clause in a master contract signed by both parties and state that it prevails over inconsistent standard terms.

Mistake 14: Selecting an Even Number of Arbitrators

Under Turkish International Arbitration Law, the parties may determine the number of arbitrators, but the number must be odd. If the parties do not determine the number, the statutory default is three arbitrators.

A clause providing for two arbitrators creates an avoidable problem.

The parties may have intended that each side appoint one arbitrator, but they failed to establish who will act as chair or break a deadlock.

The clause should provide for:

• One arbitrator; or
• Three arbitrators; or
• Another odd number appropriate to the dispute.

For most commercial cases, one or three arbitrators will be sufficient.

Mistake 15: Selecting Three Arbitrators for Every Dispute

Although three arbitrators may provide a broader range of experience, they also increase:

• Arbitrator fees;
• Scheduling difficulties;
• Administrative complexity;
• Hearing costs;
• Time required for deliberations.

A three-member tribunal may be suitable for a major construction, energy, investment or M&A dispute. It may be disproportionate for a relatively straightforward unpaid invoice.

The parties may use a value-based mechanism:

“The tribunal shall consist of a sole arbitrator where the total amount in dispute does not exceed EUR 2,000,000 and three arbitrators where it exceeds that amount.”

The clause should also explain how counterclaims and multiple currencies affect the threshold.

Mistake 16: Naming an Individual Arbitrator Permanently

Some contracts state:

“All disputes shall be resolved by Mr X as sole arbitrator.”

This may appear efficient but creates serious long-term risk.

The named person may:

• Refuse the appointment;
• Die;
• Retire;
• Become ill;
• Develop a conflict of interest;
• Lose the required professional qualification;
• Lack availability when the dispute arises.

Turkish International Arbitration Law provides that where arbitrators are named in the arbitration agreement and the mandate of a decisive number of those named arbitrators ends, the arbitration may terminate. By contrast, where the arbitrators are not named, a replacement process can ordinarily be used.

The safer approach is to establish an appointment mechanism rather than permanently name an individual.

Mistake 17: Creating Impractical Arbitrator Qualifications

Parties sometimes require the arbitrator to possess an unrealistic combination of qualifications.

For example:

“The sole arbitrator must be a Turkish-qualified lawyer, a licensed civil engineer, fluent in Turkish, English and German, and have at least 20 years of experience in offshore wind projects in Central Asia.”

Such wording may make it impossible to find a qualified candidate.

Qualifications should be limited to what is genuinely necessary.

Suitable requirements may include:

• Fluency in the arbitration language;
• Experience in a particular industry;
• Legal experience with the governing law;
• Independence from both parties.

The parties should also avoid qualifications that create nationality discrimination or eliminate most suitable candidates.

Mistake 18: Giving One Party Unilateral Control over Tribunal Appointment

A clause allowing one party alone to appoint the sole arbitrator or every member of the tribunal may face serious fairness and enforceability objections.

Party autonomy does not justify a process that deprives the opposing party of an equal opportunity to participate in tribunal constitution.

Under Turkish law, parties have equal procedural rights and must be given an opportunity to present their claims and defences. Arbitrators must also remain independent and impartial.

A balanced mechanism may provide:

• Joint appointment of a sole arbitrator;
• One appointment by each party and selection of a chair by the co-arbitrators;
• Appointment by a neutral institution if the parties fail to act.

Mistake 19: Failing to Include a Default Appointment Mechanism

A clause may provide that the parties will agree on a sole arbitrator but fail to explain what happens if they cannot agree.

The applicable arbitration law or institutional rules may supply a default solution. Turkish International Arbitration Law permits court appointment where the parties cannot agree or an agreed appointment process fails.

Nevertheless, institutional arbitration usually provides a more predictable appointment framework.

A clause may state:

“The tribunal shall consist of a sole arbitrator jointly nominated by the parties. If no agreement is reached within 30 days, the sole arbitrator shall be appointed by ISTAC in accordance with its Rules.”

Mistake 20: Ignoring Multiparty Tribunal Appointment

The traditional three-member procedure assumes two opposing parties.

Corporate, construction and energy disputes may involve several claimants and respondents. If each party is entitled to appoint an arbitrator individually, the tribunal may become unworkable or appointment equality may be compromised.

Multiparty clauses should explain whether parties on the same side must nominate jointly and what happens if they fail to do so.

Institutional rules may resolve this issue more effectively than a short bespoke clause.

Mistake 21: Failing to Coordinate Related Contracts

A transaction may involve:

• A share purchase agreement;
• A shareholders’ agreement;
• A guarantee;
• A financing agreement;
• An EPC contract;
• A supply contract;
• A licence agreement.

If one contract selects ISTAC arbitration in Istanbul, another selects foreign courts and a third selects ad hoc arbitration, related disputes may proceed in separate forums.

This creates a risk of:

• Duplicated evidence;
• Inconsistent findings;
• Additional cost;
• Jurisdictional disputes;
• Inability to consolidate.

The dispute-resolution clauses across the transaction should be reviewed as one integrated system.

Mistake 22: Assuming Non-Signatories Are Automatically Bound

A company is not automatically bound by an arbitration clause merely because its parent, subsidiary, shareholder or director signed the contract.

Similarly, a guarantor may not be bound by the arbitration clause in the principal contract unless the guarantee incorporates that clause or contains compatible wording.

The arbitration agreement should identify the parties clearly and require future transferees or shareholders to sign accession documents where appropriate.

Where group companies are expected to perform material obligations, they should enter into a legally effective arbitration agreement rather than relying on corporate affiliation alone.

Mistake 23: Drafting Unclear Pre-Arbitration Requirements

Multi-tier clauses may require negotiation, mediation, expert determination or a dispute-board process before arbitration.

These procedures can promote settlement but may also generate preliminary disputes.

A defective clause might state:

“The parties shall attempt to settle amicably before starting arbitration.”

It does not explain:

• How negotiations begin;
• Who must participate;
• How long negotiations continue;
• Whether the process is mandatory;
• When arbitration may start;
• What happens if one party refuses to participate.

A more workable clause should specify:

• The written notice initiating negotiation;
• The representatives who must meet;
• A fixed period;
• Whether mediation is required;
• The point at which arbitration may begin;
• Whether urgent interim relief remains available.

A clause should not allow one party to prevent arbitration indefinitely by refusing to attend a meeting.

Mistake 24: Failing to Preserve Limitation Periods during Negotiation

A lengthy negotiation or mediation period may consume part of the applicable limitation period.

The clause should not assume that settlement discussions automatically suspend every statutory deadline.

The parties may need:

• A contractual standstill agreement;
• Protective commencement of arbitration;
• A provision allowing urgent filing;
• Clear rules on when arbitration is deemed commenced.

Turkish International Arbitration Law determines the commencement date through the appointment or notification mechanism applicable to the case.

Mistake 25: Failing to Specify the Arbitration Language

An international contract may be written in Turkish and English while the parties’ teams use several other languages.

If the clause does not select the arbitration language, the tribunal may determine it. Turkish law permits the parties to select Turkish or the official language of a state recognised by Türkiye; if they do not agree, the tribunal determines the language.

The language affects:

• Pleadings;
• Hearings;
• Witness statements;
• Expert reports;
• Translations;
• Arbitrator selection;
• Costs.

Selecting two languages for every stage may double translation and interpretation expenses.

The clause should normally identify one procedural language unless a bilingual process is genuinely necessary.

Mistake 26: Treating the Contract Language as the Arbitration Language

The fact that a contract is bilingual does not necessarily mean that both languages must govern the arbitration.

The clause should state the procedural language expressly.

The parties should also provide which contractual version prevails where Turkish and English texts conflict.

For example:

“The language of arbitration shall be English. In the event of inconsistency between the Turkish and English versions of this Agreement, the English version shall prevail.”

The choice should reflect the governing law, evidence, witnesses and likely enforcement jurisdictions.

Mistake 27: Failing to Address Interim and Emergency Relief

Urgent protection may be necessary to:

• Freeze assets;
• Preserve goods;
• Protect trade secrets;
• Prevent an unauthorised share transfer;
• Secure evidence;
• Restrain a bond call.

A clause should not suggest that requesting court relief waives arbitration.

Turkish law expressly preserves court applications for interim injunctions and attachments. Tribunals may also grant measures within statutory limits, but they cannot directly bind third parties or require compulsory action by state authorities.

Where institutional emergency arbitration is desired, the clause should ensure that the selected rules provide that mechanism and should avoid accidentally excluding it.

ISTAC’s model-clause guidance expressly allows parties to decide whether its Emergency Arbitrator Rules will apply.

Mistake 28: Giving the Tribunal Powers It Cannot Exercise

A clause may attempt to authorise arbitrators to:

• Cancel a land-registry entry;
• Bind a non-party bank;
• Impose criminal sanctions;
• Cancel an administrative licence;
• Order a public registry to act;
• Declare a company bankrupt.

Contractual wording cannot grant the tribunal sovereign or coercive authority that the law reserves for courts or public bodies.

The clause should distinguish between contractual remedies and external legal acts requiring judicial or administrative intervention.

Mistake 29: Failing to Address Confidentiality

Many parties assume that arbitration is automatically confidential in every respect.

A contract should state whether confidentiality extends to:

• The existence of proceedings;
• Pleadings;
• Evidence;
• Hearings;
• Awards;
• Settlement discussions;
• Experts and witnesses;
• Funders and insurers;
• Enforcement proceedings.

The clause should also include reasonable exceptions for legal obligations, professional advice, regulatory reporting, interim protection and enforcement.

Mistake 30: Ignoring Data Protection and Cross-Border Transfers

International arbitration may require personal data to be transferred to foreign arbitrators, counsel, experts, institutions and technology providers.

A confidentiality clause alone does not establish compliance with Turkish data-protection rules.

Complex transactions may benefit from a procedural provision requiring compliance with applicable data-protection laws and authorising the tribunal to adopt a data-protection and cybersecurity protocol.

Mistake 31: Assuming the Award Can Never Be Challenged

A clause may state:

“The award shall be final, binding and not subject to any challenge whatsoever.”

Arbitral awards are final and binding in the sense that they are not ordinarily subject to a full appeal on the merits.

However, mandatory setting-aside and enforcement-review mechanisms may remain available.

Under Turkish law, a Turkish-seated international award may be challenged on limited statutory grounds, including invalidity of the arbitration agreement, procedural irregularities, excess of jurisdiction, non-arbitrability and public policy.

The parties should not promise an absolute immunity from all judicial review where mandatory law provides otherwise.

Mistake 32: Ignoring International Enforcement

An arbitration clause should be drafted with the eventual enforcement process in mind.

Article II of the New York Convention requires contracting states to recognise qualifying written arbitration agreements, while Article V limits the grounds for refusing recognition and enforcement of awards. The Convention is designed to ensure that foreign and non-domestic arbitral awards are generally capable of recognition and enforcement across contracting jurisdictions.

Enforcement risks may arise where:

• The arbitration agreement was not properly documented;
• A party was not bound;
• The tribunal was appointed contrary to the clause;
• The award exceeded the clause;
• The procedure contradicted the parties’ agreement;
• The subject matter was non-arbitrable.

A clause should therefore be judged not only by whether arbitration can begin, but also by whether the resulting award can survive annulment and enforcement review.

Sample ISTAC Arbitration Clause for Turkish Contracts

The following clause may be used as a starting point:

“Any dispute, controversy or claim arising out of or relating to this Agreement, including its formation, existence, validity, interpretation, performance, breach, termination or consequences of termination, shall be finally resolved by arbitration administered by the Istanbul Arbitration Centre in accordance with the ISTAC Arbitration Rules.

The seat of arbitration shall be Istanbul, Türkiye. The tribunal shall consist of three arbitrators. The language of arbitration shall be English. This Agreement and the arbitration agreement contained in this clause shall be governed by Turkish law.

Nothing in this clause shall prevent a party from applying to an emergency arbitrator or a competent court for interim, conservatory or protective relief. Any such application shall not constitute a waiver of the arbitration agreement.

Information relating to the arbitration shall remain confidential except where disclosure is reasonably necessary for the conduct of the arbitration, compliance with a legal or regulatory obligation, protection of a legal right, or recognition and enforcement of the award.”

The number of arbitrators, language, seat and governing law should be adapted to the transaction. ISTAC itself recommends that parties supplement its model clause by identifying the place, language, number of arbitrators and substantive governing law.

Arbitration-Clause Drafting Checklist

Before signing an international contract connected with Türkiye, the parties should confirm:

• Is arbitration clearly mandatory?
• Is the correct institution named?
• Do the institution and rules match?
• Is the arbitration institutional or ad hoc?
• Is the legal seat stated clearly?
• Is the hearing venue distinguished from the seat?
• Is the substantive governing law identified?
• Is the law of the arbitration agreement identified?
• Does the clause cover contractual and related non-contractual claims?
• Are any exclusions deliberate and precise?
• Is the subject matter arbitrable?
• Is the written-form requirement satisfied?
• Are incorporated terms clearly identified and delivered?
• Is the number of arbitrators odd?
• Is the tribunal size proportionate?
• Is there a workable default appointment mechanism?
• Are arbitrator qualifications realistic?
• Are multiparty appointments addressed?
• Are related contracts compatible?
• Are future transferees required to accede?
• Are pre-arbitration procedures clear and time-limited?
• Are limitation periods protected?
• Is the arbitration language specified?
• Is interim and emergency relief preserved?
• Is confidentiality addressed?
• Are data-protection risks considered?
• Is the clause capable of producing an enforceable award?

Frequently Asked Questions

What makes an arbitration clause valid under Turkish law?

The parties must agree in writing to submit all or some disputes arising from an identified legal relationship to arbitration. The agreement may appear in the principal contract, a separate agreement, exchanged communications, electronic records or an incorporated document satisfying the statutory conditions.

Is the phrase “the parties may arbitrate” sufficient?

It creates unnecessary uncertainty because it may be interpreted as requiring further consent after the dispute arises. Mandatory language stating that disputes “shall be finally resolved by arbitration” is preferable.

Must an arbitration institution be selected?

No. Parties may use institutional or ad hoc arbitration. However, ad hoc clauses should provide a workable tribunal-appointment mechanism and identify applicable procedural rules.

Does selecting ISTAC automatically make Istanbul the seat?

The safer position is to state the seat expressly. ISTAC’s model-clause guidance separately invites parties to specify the place of arbitration.

Can the contract provide for both arbitration and Turkish courts?

The contract may preserve court access for interim protection, judicial assistance, annulment and enforcement. It should not give both the court and tribunal overlapping jurisdiction over the same merits without a clear allocation.

How many arbitrators may be appointed?

Under Turkish International Arbitration Law, the number must be odd. If the parties make no determination, the statutory default is three arbitrators.

Can the parties name a particular arbitrator?

They can, but permanent naming creates serious risks if the person later becomes unavailable or conflicted. A neutral appointment mechanism is generally safer.

Can the tribunal decide whether the arbitration clause is valid?

Yes. Turkish law recognises competence-competence and separability. The tribunal may decide objections concerning its jurisdiction, and invalidity of the principal contract does not automatically invalidate the arbitration clause.

Can an arbitration clause cover tort and unjust-enrichment claims?

A broadly drafted clause may cover related non-contractual claims. Narrow wording may lead to parallel proceedings, so the scope should be drafted carefully.

Can all corporate disputes be arbitrated?

Contractual shareholder claims are often arbitrable. Claims producing constitutive effects against the company, all shareholders, creditors or official registries require separate analysis.

Can a party seek a Turkish court injunction despite the clause?

Yes. Seeking an interim injunction or interim attachment before or during arbitration does not itself violate the arbitration agreement.

Can a defective arbitration clause prevent enforcement?

Yes. Invalid consent, irregular tribunal appointment, excess of jurisdiction and serious procedural inconsistency may create annulment or enforcement objections.

Conclusion

International arbitration clauses used in Turkish contracts should never be treated as insignificant boilerplate.

A few unclear words can determine whether the parties arbitrate, litigate or spend months arguing about the correct forum before the substantive dispute is considered.

The most frequent drafting mistakes include optional language, conflicting court clauses, incorrect institutional names, incompatible rules, failure to identify the seat, confusion between governing laws, narrow scope, defective incorporation, unrealistic arbitrator qualifications and uncoordinated clauses across related contracts.

Multiparty transactions require particular care. The company, shareholders, guarantors, contractors and project entities expected to participate in the dispute should be bound through compatible written agreements.

The clause should also anticipate what happens when the commercial relationship breaks down. It should provide a workable tribunal-appointment process, preserve urgent court and emergency relief, establish clear pre-arbitration procedures and identify the language and governing law.

The final test is enforceability.

A clause is not successful merely because an arbitration can be commenced. It should create a tribunal whose jurisdiction, procedure and award can withstand review at the seat and in every country where enforcement may be required.

Using an institution’s official model clause is a strong starting point, but model wording must still be adapted to the transaction.

The seat, number of arbitrators, language, substantive law, arbitration-agreement law, multiparty structure, interim remedies and confidentiality requirements should reflect the actual commercial relationship.

Careful drafting before signature is substantially less expensive than jurisdictional litigation after a dispute arises.

Legal Disclaimer: This article is provided for general informational purposes only and does not constitute legal advice. The validity and effectiveness of an arbitration clause depend on its wording, the parties, subject matter, applicable law, arbitral seat, institutional rules and intended enforcement jurisdictions. Transaction-specific legal advice should be obtained before signing or relying on an international arbitration agreement.