Choosing the Seat of Arbitration in Turkey: Legal Effects, Strategic Considerations and Drafting Guidance

Introduction

The selection of the seat of arbitration is one of the most important decisions made when drafting an arbitration agreement. Although parties often devote considerable attention to the arbitration institution, governing law, language and number of arbitrators, the legal seat is sometimes left unspecified or confused with the physical location of hearings.

This can be a serious contractual mistake.

The seat of arbitration determines the legal home of the arbitral proceedings. It connects the arbitration to a national legal system, identifies the procedural arbitration law and influences which courts may provide judicial assistance or supervise the proceedings. It also determines where an action to set aside the arbitral award will ordinarily be brought and affects the legal classification of the award during international enforcement.

Where Turkey is chosen as the seat, the arbitration may be governed by either the Turkish International Arbitration Law No. 4686 or the domestic arbitration provisions of the Turkish Code of Civil Procedure No. 6100. The applicable regime depends principally on whether the dispute contains a legally recognised foreign element.

Turkey, and Istanbul in particular, may be selected as the seat for disputes involving international sales, construction, infrastructure, energy, transportation, technology, corporate transactions, shareholders’ agreements, joint ventures, finance and insurance.

However, selecting Istanbul as the hearing venue is not necessarily the same as choosing Istanbul as the legal seat. The parties may hold hearings in Istanbul while the arbitration is legally seated in another country. Conversely, an arbitration legally seated in Istanbul may conduct all hearings online or in another jurisdiction without changing its legal seat.

This guide explains the legal and commercial consequences of choosing the seat of arbitration in Turkey, the difference between the seat and hearing venue, the applicable Turkish arbitration legislation, court supervision, interim measures, annulment proceedings, enforcement and practical drafting considerations.

What Is the Seat of Arbitration?

The seat of arbitration is the jurisdiction to which the arbitration is legally connected.

It is sometimes described as:

• The place of arbitration;
• The juridical seat;
• The legal place of arbitration;
• The arbitral seat.

The seat does not merely identify where meetings will physically occur. It establishes the procedural legal framework within which the arbitration operates.

The seat may determine:

• The applicable arbitration legislation;
• The mandatory procedural rules;
• The courts authorised to support the arbitration;
• The courts competent to hear an action for annulment;
• The procedural requirements governing the award;
• The legal nationality of the arbitral award;
• The relationship between the tribunal and national courts.

Under Article 425 of the Turkish Code of Civil Procedure, the parties or the arbitration institution selected by them may freely determine the seat. If they have not agreed, the arbitrator or arbitral tribunal determines it according to the circumstances of the dispute.

Article 9 of the Turkish International Arbitration Law adopts the same principle. The parties or the institution chosen by them are free to select the seat; in the absence of an agreement, the tribunal determines it by considering the circumstances of the case.

The parties should therefore treat the seat as an intentional legal choice rather than an administrative detail.

Seat of Arbitration and Hearing Venue Are Different

The legal seat and the physical venue of hearings are separate concepts.

For example, the parties may agree that:

• The seat is Istanbul;
• The language is English;
• The tribunal consists of three arbitrators;
• Witnesses attend from London and Dubai;
• The evidentiary hearing takes place in Paris;
• Procedural meetings are conducted online.

The arbitration remains legally seated in Istanbul.

Both Turkish domestic and international arbitration legislation permit the tribunal to meet elsewhere where the proceedings require it. Article 425 of the Code of Civil Procedure allows the tribunal, after informing the parties, to meet in another location and conduct hearings, inspections or similar procedural acts there. Article 9 of the International Arbitration Law similarly permits meetings outside the legal seat.

This distinction provides significant practical flexibility.

Parties can choose Turkey for its legal arbitration framework without requiring every hearing, witness examination, expert meeting or site inspection to take place physically in Turkey.

Similarly, holding a hearing in Istanbul does not automatically make Istanbul the legal seat. The arbitration agreement, institutional decision or tribunal’s determination must establish the seat.

Why Is the Seat of Arbitration Important?

The seat affects nearly every stage of arbitration, from commencement to enforcement.

A poorly considered seat may lead to:

• Unexpected procedural rules;
• Difficult court applications;
• Uncertainty regarding interim protection;
• Increased annulment risk;
• Enforcement complications;
• Parallel proceedings;
• Additional translation and representation costs.

A well-chosen seat provides a clear procedural structure and reduces the likelihood of jurisdictional disputes.

The Seat Determines the Procedural Arbitration Law

One of the principal functions of the seat is determining the lex arbitri, meaning the national law governing the arbitral procedure.

This procedural law is distinct from the law governing the merits of the contract.

For example, parties may agree that:

• The seat of arbitration is Istanbul;
• English law governs the commercial contract;
• ISTAC Rules govern the institutional procedure;
• English is the language of arbitration.

In this example, Turkish arbitration legislation governs the legal framework of the proceedings because the seat is in Turkey, while English law governs the substantive contractual dispute.

The parties should therefore distinguish among:

1. The law governing the principal contract;
2. The law governing the arbitration agreement;
3. The procedural law of the seat;
4. The institutional arbitration rules.

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

Which Turkish Arbitration Law Applies?

Turkey has two principal arbitration regimes.

International Arbitration Seated in Turkey

The Turkish International Arbitration Law No. 4686 applies principally to disputes containing a foreign element where the seat is determined as Turkey.

Article 1 states that the law governs international arbitration involving a foreign element where the seat is Turkey or where its provisions have been selected within the statutory framework. Article 2 identifies circumstances that give a dispute an international character, including parties located in different countries, substantial performance abroad, foreign capital and cross-border movement of capital or goods.

A dispute may therefore qualify as international even where both parties are Turkish companies.

For example, an arbitration between two Turkish companies may contain a foreign element where:

• The project is located outside Turkey;
• Foreign financing is required;
• Equipment is imported from another country;
• The transaction involves international movement of goods;
• A substantial part of the contractual obligations is performed abroad.

Domestic Arbitration Seated in Turkey

Domestic arbitration is governed by Articles 407 to 444 of the Turkish Code of Civil Procedure where:

• The dispute does not contain the foreign element defined under the International Arbitration Law; and
• The seat is located in Turkey.

The domestic regime regulates the arbitration agreement, constitution of the tribunal, procedure, interim measures, evidence, award, annulment and costs.

Choosing Turkey as the seat is therefore not sufficient by itself to identify the applicable statute. The parties must also examine whether the underlying legal relationship contains a foreign element.

The Seat Identifies the Supervisory Courts

The seat determines which national courts exercise supervisory authority over the arbitration.

Where Turkey is the seat, Turkish courts may perform functions expressly assigned by the applicable arbitration legislation.

Depending on the circumstances, court involvement may concern:

• Appointment of arbitrators;
• Challenges to arbitrators;
• Termination of an arbitrator’s mandate;
• Interim injunctions;
• Interim attachment;
• Evidence preservation;
• Judicial assistance in collecting evidence;
• Extension of the arbitration period;
• Setting aside the final award.

Turkish arbitration law is based on limited court intervention. Courts do not supervise every procedural decision and do not manage the merits of the arbitration. Judicial assistance is available only in circumstances permitted by legislation.

The seat is nevertheless important because it identifies the Turkish judicial district legally connected with many arbitration-related applications.

The exact court and procedure depend on:

• Whether the arbitration is domestic or international;
• The type of application;
• The subject matter of the underlying dispute;
• The applicable statutory provision.

Parties should not assume that all arbitration-related applications are filed before the same court. Appointment, interim protection, annulment and enforcement may be subject to different procedural rules.

The Seat Determines the Court Competent for Annulment

The seat has particular importance after the final award is rendered.

An action to set aside an arbitral award is ordinarily brought before the competent courts of the seat. The annulment court does not conduct a new trial. It reviews the award only on limited grounds prescribed by the procedural law.

For domestic arbitration, Article 439 of the Turkish Code of Civil Procedure provides that an arbitral award may be challenged only through an annulment action brought before the competent court at the seat. The statutory grounds include invalidity of the arbitration agreement, improper tribunal constitution, excess of jurisdiction, serious procedural irregularity, violation of equality or the right to be heard, non-arbitrability and public policy.

A Turkey-seated international award is subject to the annulment regime established by Article 15 of the International Arbitration Law.

Therefore:

• An Istanbul-seated award is generally challenged in Turkey;
• A London-seated award is generally challenged in England;
• A Paris-seated award is generally challenged in France;
• A Geneva-seated award is generally challenged in Switzerland.

Selecting the seat means selecting the national courts that will have primary supervisory jurisdiction over the award.

The Seat Does Not Permit a Full Appeal

Choosing Turkey as the seat does not mean that the losing party may appeal the award as though it were an ordinary Turkish court judgment.

Turkish arbitration legislation limits judicial review to specified annulment grounds.

The annulment court does not ordinarily reconsider:

• Whether the tribunal interpreted the contract correctly;
• Whether a witness was credible;
• Whether an expert used the best methodology;
• Whether damages should have been higher or lower;
• Whether another interpretation of substantive law was possible.

The court examines whether the arbitral process satisfied fundamental jurisdictional and procedural requirements.

This limited review protects the finality of arbitration.

The Seat Affects Interim Measures

Urgent protection may be required before or during arbitration.

A party may need to:

• Prevent the transfer of assets;
• Obtain an interim attachment;
• Protect confidential information;
• Preserve evidence;
• Maintain the contractual status quo;
• Prevent a prohibited share transfer;
• Protect goods or equipment;
• Suspend an allegedly unlawful guarantee call.

Where Turkey is the seat, Turkish arbitration legislation determines the relationship between the tribunal and Turkish courts concerning interim measures.

Article 6 of the International Arbitration Law expressly provides that applying to a court for an interim injunction or interim attachment before or during arbitration does not violate the arbitration agreement. It also allows the tribunal to grant certain interim measures, subject to restrictions concerning coercive enforcement, public authorities and third parties.

The domestic arbitration regime similarly permits arbitral and judicial interim protection within the conditions established by the Code of Civil Procedure.

The practical effectiveness of an interim measure may depend on where the relevant asset or person is located. Even where the seat is Istanbul, a party may need to seek court protection in another jurisdiction if the asset is abroad.

The seat should therefore be evaluated together with the likely location of:

• Bank accounts;
• Real estate;
• Goods;
• Shares;
• Equipment;
• Evidence;
• Third-party custodians.

The Seat Influences the Legal Nationality of the Award

The legal seat generally determines where the arbitral award is considered to have been made.

This affects whether the award is treated as domestic, international or foreign in later proceedings.

Under the New York Convention, contracting states generally recognise and enforce foreign and non-domestic arbitral awards, subject to limited refusal grounds. The Convention also permits refusal where an award has been set aside or suspended by a competent authority in the country in which, or under the law of which, it was made.

Accordingly, an award seated in Istanbul will normally be treated as a Turkey-seated award even where:

• The arbitrators are foreign;
• The language is English;
• Hearings take place abroad;
• A foreign institution administers the proceedings;
• Foreign substantive law governs the merits.

The institution’s location does not replace the legal seat.

Institutional Rules and the Seat Are Separate Choices

Parties sometimes assume that choosing an institution automatically determines the seat.

This is not always correct.

The parties may select:

• ISTAC arbitration seated in Istanbul;
• ISTAC arbitration seated in another Turkish city;
• ISTAC arbitration seated outside Turkey;
• ICC arbitration seated in Istanbul;
• Ad hoc UNCITRAL arbitration seated in Istanbul.

The institution administers the arbitration, while the seat determines its juridical home.

ISTAC’s model arbitration clause expressly recommends adding a separate provision identifying the place of arbitration by city and country. It also recommends specifying the language, number of arbitrators and law governing the merits.

This confirms that choosing ISTAC does not eliminate the need to determine the seat clearly.

Can Istanbul Be Selected as the Seat of Arbitration?

Yes. Parties to domestic and international commercial agreements may select Istanbul as the seat, provided that the dispute is legally capable of arbitration.

Istanbul may be commercially attractive because it offers:

• Access to Turkish arbitration legislation;
• Availability of Turkish and international arbitration lawyers;
• Institutional administration through ISTAC;
• International transportation connections;
• Hearing and conference facilities;
• Availability of technical and financial experts;
• The possibility of conducting proceedings in Turkish or English;
• Proximity to businesses operating across Europe, Asia and the Middle East.

ISTAC provides institutional arbitration services for both domestic and foreign parties and publishes a model clause permitting the parties to specify the seat expressly.

The selection of Istanbul should nevertheless be made because its legal framework is suitable for the transaction, not simply because the parties or their lawyers are located there.

Can Another Turkish City Be Chosen?

The parties may choose another city in Turkey as the seat.

For example:

• Ankara may be selected for a project centred on public institutions or national infrastructure;
• İzmir may be selected for an Aegean trade or logistics transaction;
• Antalya may be selected for tourism and hospitality disputes;
• Bursa may be selected for manufacturing and automotive disputes.

The choice of city may affect the territorial connection with the relevant Turkish courts.

However, the parties can still conduct hearings elsewhere or online. Choosing Ankara as the legal seat does not prevent a hearing from taking place in Istanbul.

The city and country should both be stated clearly.

A clause saying only “arbitration shall take place in Turkey” may leave uncertainty about the specific seat and competent courts.

Advantages of Choosing Turkey as the Seat

A Defined Statutory Framework

Turkey has separate legislative regimes for domestic and international arbitration. These laws regulate tribunal jurisdiction, procedure, interim measures, evidence, awards and annulment.

Party Autonomy

The parties may choose institutional rules, language, number of arbitrators, appointment procedure and many aspects of the arbitral procedure, subject to mandatory provisions.

Limited Judicial Review

Turkey-seated awards are not subject to an ordinary appeal on the merits. Judicial review is limited to statutory annulment grounds.

Flexibility of Hearing Location

Turkish law permits hearings, inspections and meetings to take place outside the seat where appropriate.

Availability of ISTAC

Parties may use ISTAC’s standard arbitration, fast-track and emergency procedures where the relevant rules apply.

International Enforcement Framework

Awards may potentially be enforced abroad under the New York Convention, subject to the requirements of the enforcing jurisdiction.

Matters to Consider before Selecting a Turkish Seat

1. Nature of the Dispute

The parties should assess whether the likely disputes are contractual and arbitrable.

Most commercial payment, construction, supply, energy, corporate and technology claims may be suitable for arbitration.

Greater care is required where claims may concern:

• Rights in rem over Turkish immovable property;
• Administrative decisions;
• Bankruptcy status;
• Criminal liability;
• Corporate remedies affecting third parties;
• Matters outside the parties’ free disposition.

The seat cannot make a legally non-arbitrable dispute arbitrable.

2. Location of the Parties

A Turkish seat may be efficient where:

• One or both parties are established in Turkey;
• The project is located in Turkey;
• The contract is performed substantially in Turkey;
• The relevant documents are in Turkey;
• Management and witnesses are located in Turkey.

For a completely unrelated international transaction, the parties should still compare Turkey with other possible neutral seats.

3. Location of Assets

The seat does not guarantee that the award debtor will have assets in Turkey.

Parties should identify where enforcement is likely to occur.

If the debtor’s assets are located in several countries, the New York Convention framework becomes particularly important.

4. Need for Interim Protection

The parties should consider whether urgent protection may be required against:

• Assets in Turkey;
• Turkish banks;
• Turkish company shares;
• Equipment located in Turkey;
• Turkish contractual counterparties.

A Turkish seat may facilitate coordination with Turkish court proceedings where local assets or evidence are involved.

5. Governing Law

Choosing Turkey as the seat does not require the parties to choose Turkish substantive law.

However, using Turkish law for both the merits and the seat may reduce the number of legal systems requiring expert evidence.

Where foreign law governs the contract, the tribunal may need evidence concerning that law.

6. Language

The parties may select English or another language for an international arbitration seated in Turkey.

The language choice should account for:

• The language of the contract;
• The language of project documents;
• Witnesses;
• Experts;
• Arbitrators;
• Translation costs;
• Potential court proceedings.

Even where the arbitration is conducted in English, Turkish translations may be required for applications before Turkish courts.

7. Representation and Local Counsel

International arbitration may involve Turkish and foreign lawyers, depending on the applicable regime.

Court applications in Turkey require careful compliance with Turkish procedural and representation rules. Parties should consider the availability of local arbitration counsel when selecting the seat.

8. Institutional or Ad Hoc Arbitration

A Turkish seat may be used with institutional or ad hoc arbitration.

Institutional arbitration generally provides:

• Administrative support;
• Appointment mechanisms;
• Cost rules;
• Challenge procedures;
• Emergency mechanisms;
• Procedural guidance.

Ad hoc arbitration may provide greater flexibility but requires careful drafting of the appointment and procedural mechanisms.

Choosing Turkey as a Neutral Seat

Turkey may also be selected where neither party is Turkish.

For example, a company from Europe and a company from the Middle East may choose Istanbul as a neutral and geographically convenient seat.

In assessing neutrality, parties should consider:

• Whether either party has a dominant connection with Turkey;
• The neutrality and expertise of arbitrators;
• The governing law;
• The language;
• Judicial support;
• Travel and hearing logistics;
• Enforcement strategy.

Neutrality does not necessarily mean selecting a jurisdiction with no connection to the transaction. It means selecting a forum that does not give one party an inappropriate procedural advantage.

What Happens If the Parties Do Not Choose a Seat?

Failure to specify the seat does not necessarily invalidate the arbitration agreement.

Under both Article 425 of the Code of Civil Procedure and Article 9 of the International Arbitration Law, the tribunal may determine the seat according to the circumstances where the parties or their chosen institution have not done so.

Nevertheless, leaving the decision until after a dispute arises may create avoidable uncertainty.

The parties may disagree concerning:

• Which procedural law applies;
• Which courts can grant assistance;
• Where annulment proceedings will be brought;
• Whether the award is domestic or foreign;
• Which city has the closest connection.

The tribunal’s determination may also produce a seat that one party did not anticipate when the contract was signed.

The preferable approach is to specify the seat during contract negotiation.

Common Mistakes When Choosing the Seat

Naming Only the Institution

“Disputes shall be resolved by ISTAC arbitration.”

This identifies the institution but does not expressly identify the seat.

Naming Only a Hearing Location

“Hearings shall take place in Istanbul.”

This may determine the physical venue without clearly establishing Istanbul as the legal seat.

Naming Only the Country

“The arbitration shall be seated in Turkey.”

This is better than silence but may leave uncertainty concerning the city and territorially connected courts.

Confusing Seat and Governing Law

“This agreement is governed by Turkish law; therefore, arbitration shall take place under Turkish law.”

The governing law of the contract does not automatically establish the seat.

Using Inconsistent Clauses

“The courts of London shall have exclusive jurisdiction. All disputes shall be finally resolved by arbitration seated in Istanbul.”

Without clarification, this creates uncertainty concerning whether the court clause applies only to interim and supervisory matters or contradicts the arbitration agreement.

Selecting an Institution’s City Automatically

Choosing ICC arbitration does not necessarily make Paris the seat. Choosing ISTAC does not automatically make Istanbul the seat.

Ignoring Related Contracts

A shareholders’ agreement may provide for Istanbul arbitration while the share purchase agreement provides for London arbitration and the guarantee refers to Turkish courts.

Related contracts should use compatible dispute resolution provisions where possible.

Recommended Seat Clause

A clear provision may state:

The seat, or legal place, of arbitration shall be Istanbul, Türkiye. Hearings and procedural meetings may be conducted at any physical or virtual location determined by the arbitral tribunal after consultation with the parties, without changing the legal seat of arbitration.

Where ISTAC is selected, the clause may be expanded as follows:

Any dispute, controversy or claim arising out of or in connection with this Agreement, including its formation, validity, interpretation, performance, breach, termination or consequences of termination, shall be finally resolved under the Istanbul Arbitration Centre Arbitration Rules. The seat, or legal place, of arbitration shall be Istanbul, Türkiye. The tribunal shall consist of three arbitrators. The language of arbitration shall be English. Turkish law shall govern the merits of the dispute.

The wording should be adapted to the specific contract.

Seat Selection Checklist

Before choosing Turkey as the seat, parties should determine:

1. Whether the dispute is arbitrable under Turkish law;
2. Whether the transaction contains a foreign element;
3. Whether the HMK or International Arbitration Law is likely to apply;
4. Which city in Turkey should be selected;
5. Which institution will administer the proceedings;
6. Which courts may provide judicial assistance;
7. Where annulment proceedings would be brought;
8. Which substantive law governs the contract;
9. Which law governs the arbitration agreement;
10. Which language will be used;
11. Where witnesses and evidence are located;
12. Where urgent interim relief may be required;
13. Where the debtor’s assets are located;
14. Whether foreign enforcement is likely;
15. Whether related contracts contain compatible clauses.

Frequently Asked Questions

What is the seat of arbitration?

The seat is the legal home of the arbitration. It determines the procedural law and the courts with supervisory authority.

Is the seat the same as the hearing venue?

No. Hearings may take place in another city, country or online without changing the seat.

Can Istanbul be selected as the seat for a contract governed by foreign law?

Yes. The seat and substantive governing law are separate choices.

Does choosing ISTAC automatically make Istanbul the seat?

No. ISTAC recommends that the parties specify the place of arbitration separately in their clause.

Can ICC arbitration be seated in Istanbul?

Yes. A foreign arbitration institution may administer proceedings legally seated in Istanbul.

Can an arbitration seated in Istanbul hold hearings abroad?

Yes. Turkish arbitration legislation permits the tribunal to meet and conduct hearings elsewhere where necessary.

Which law applies to an Istanbul-seated arbitration?

International arbitration containing a foreign element is principally governed by Law No. 4686. Domestic arbitration without a foreign element is governed by Articles 407 to 444 of the Code of Civil Procedure.

Where is an Istanbul-seated award challenged?

An action to set aside a Turkey-seated award is brought before the competent Turkish court under the applicable arbitration legislation.

Can Turkish courts review the merits of the award?

There is no ordinary appeal on the merits. Judicial review is limited to statutory annulment grounds.

Is a Turkey-seated award enforceable abroad?

It may be recognised and enforced under the New York Convention in contracting jurisdictions, subject to the Convention and the law of the enforcement country.

Conclusion

Choosing the seat of arbitration in Turkey has substantial procedural and commercial consequences.

The seat is not simply the city where a hearing takes place. It is the legal home of the arbitration and determines the national procedural framework, supervisory courts, annulment jurisdiction and legal nationality of the award.

Where the seat is Turkey, international disputes containing a foreign element are principally governed by the Turkish International Arbitration Law No. 4686. Domestic disputes without a foreign element are governed by Articles 407 to 444 of the Turkish Code of Civil Procedure.

Both regimes recognise party autonomy. The parties or their selected arbitration institution may determine the seat. If they fail to do so, the tribunal may select it according to the circumstances.

Istanbul may be an appropriate seat for domestic and international commercial disputes connected with construction, energy, trade, technology, corporate transactions, transportation and finance. It may also serve as a neutral seat between foreign parties.

Nevertheless, the selection should be made after analysing:

• Arbitrability;
• Applicable procedural law;
• Court assistance;
• Interim protection;
• Annulment procedure;
• Governing law;
• Language;
• Witnesses and evidence;
• Location of assets;
• International enforcement.

The arbitration clause should state both the city and country and should distinguish the legal seat from the location of hearings.

A clearly drafted clause may prevent costly preliminary disputes and provide the tribunal, courts and parties with a predictable legal framework from the beginning of the proceedings through enforcement of the final award.