Arbitrator Appointment and Challenge in Turkey: Independence, Impartiality and Conflicts of Interest

Introduction

The selection of the arbitral tribunal is one of the most important stages of any arbitration. Unlike court litigation, where the judge is assigned through the judicial system, arbitration generally allows the parties to participate directly or indirectly in choosing the individuals who will decide their dispute.

This freedom is one of arbitration’s principal advantages. The parties may select arbitrators who understand the relevant industry, contractual structure, governing law and language. A construction dispute may benefit from an arbitrator experienced in delay and engineering claims, while a technology dispute may require knowledge of software development, intellectual property and data protection.

The same freedom also creates significant legal responsibility. An arbitrator must not act as the representative of the party that nominated him or her. Every tribunal member, including a party-appointed arbitrator, must remain independent and impartial throughout the proceedings.

Questions concerning arbitrator independence may arise from:

• Prior legal work for one of the parties;
• Relationships with counsel;
• Financial interests in the outcome;
• Repeated appointments;
• Connections with affiliated companies;
• Family or personal relationships;
• Previous involvement in the dispute;
• Public statements about the case;
• Relationships with experts, insurers or third-party funders.

If a potential conflict is not disclosed or is not addressed properly, the arbitration may be disrupted by a challenge. In serious cases, the final award may face annulment or enforcement objections.

Arbitrator appointment and challenge in Turkey are governed by the legislation applicable to the seat of arbitration and any institutional rules selected by the parties. Domestic arbitration is principally regulated by Articles 407 to 444 of the Turkish Code of Civil Procedure. International arbitration containing a statutory foreign element is principally regulated by International Arbitration Law No. 4686. Where the parties select the Istanbul Arbitration Centre, the ISTAC Arbitration Rules also govern appointment, disclosure, challenge and replacement.

This guide examines:

• The appointment of sole arbitrators and three-member tribunals;
• Arbitrator qualifications;
• Independence and impartiality;
• Disclosure obligations;
• Conflicts of interest;
• The 2024 IBA Guidelines;
• Challenge procedures under Turkish law;
• Challenges under the ISTAC Rules;
• Multi-party appointments;
• Replacement of arbitrators;
• Waiver of objections;
• Annulment and enforcement risks.

Why Does Arbitrator Selection Matter?

The arbitral tribunal controls nearly every important procedural and substantive aspect of the case.

Depending on the arbitration agreement and applicable rules, the tribunal may decide:

• Its own jurisdiction;
• The procedural timetable;
• Document-production requests;
• Witness and expert evidence;
• Interim measures;
• The applicable substantive law;
• Liability;
• Damages;
• Interest;
• Arbitration costs.

The arbitrator’s experience, availability and procedural judgment may therefore affect both the quality and efficiency of the proceedings.

An unsuitable appointment may create several problems. An arbitrator may lack sufficient time to manage the case, may be unfamiliar with the working language, may have limited experience in the relevant subject or may face a conflict that should have been identified before appointment.

The selection process should therefore consider more than professional reputation. A highly respected candidate may not be appropriate where that person lacks availability, has a relationship with a connected company or cannot conduct the proceeding within the required timetable.

Turkish Legal Framework

The applicable appointment and challenge regime depends principally on whether the arbitration is domestic or international and whether institutional rules have been selected.

Domestic arbitration

Articles 407 to 444 of the Turkish Code of Civil Procedure apply to arbitration seated in Türkiye where the dispute does not contain the foreign element defined under the International Arbitration Law.

The parties are free to determine the number of arbitrators, but the number must be odd. If the parties have not agreed otherwise, three arbitrators are appointed. Only natural persons may act as arbitrators. Where a tribunal has more than one member, at least one member must be a lawyer with five or more years of professional seniority.

International arbitration

International Arbitration Law No. 4686 applies principally to qualifying international arbitrations seated in Türkiye or where its provisions are otherwise selected within the scope of the statute.

The International Arbitration Law similarly recognises party autonomy in determining the number and method of appointment. The default number is three, only natural persons may be appointed and a court may intervene where the agreed appointment procedure fails. When making an appointment in a dispute involving parties of different nationalities, the court is also directed to consider nationality neutrality together with independence, impartiality and the parties’ agreement.

Institutional arbitration

Where the parties select the ISTAC Arbitration Rules, the Istanbul Arbitration Centre administers the appointment and challenge process.

ISTAC does not decide the merits itself. The dispute is decided by the sole arbitrator or tribunal, while the ISTAC Board performs administrative functions such as appointment, challenge and replacement in the circumstances established by the Rules. ISTAC may also act as an appointing authority in ad hoc arbitration where the parties expressly authorise the ISTAC Board to make the appointment.

Number of Arbitrators

The parties should decide whether the dispute will be determined by a sole arbitrator or a three-member tribunal.

Sole arbitrator

A sole arbitrator may be appropriate where:

• The amount in dispute is moderate;
• The legal issues are relatively limited;
• Cost efficiency is important;
• A rapid decision is required;
• The parties can agree on a suitable candidate.

A sole arbitrator generally reduces arbitrator fees and simplifies scheduling. However, one person alone decides every issue, making the selection particularly important.

Three-member tribunal

A three-member tribunal may be preferable where:

• The financial value is substantial;
• Several legal systems are involved;
• The dispute is technically complex;
• The parties prefer broader collective judgment;
• Multiple languages or industries are involved;
• The case raises sensitive jurisdictional questions.

A three-member tribunal is normally more expensive and more difficult to schedule. However, it allows the parties to combine different forms of experience, such as legal, technical and sector-specific knowledge.

Default rule under the ISTAC Rules

Under the ISTAC Rules, the parties may determine the number of arbitrators, provided that a multi-member tribunal has an odd number. If the parties have not agreed, the ISTAC Board decides whether the dispute should be resolved by a sole arbitrator or three arbitrators after considering the relevant circumstances.

Appointment of a Sole Arbitrator

In domestic arbitration, the parties may determine the appointment procedure. Where they have agreed on a sole arbitrator but cannot agree on the person, the competent court appoints the arbitrator upon a party’s application. The court must consider the parties’ agreement and the principles of independence and impartiality.

Under the ISTAC Rules, the parties jointly select the sole arbitrator. If they fail to agree within 30 days after the respondent receives the request for arbitration, or within an additional period granted by the Secretariat, the ISTAC Board appoints the sole arbitrator.

The arbitration clause should avoid naming an individual sole arbitrator unless the parties have also addressed what happens if that person:

• Dies;
• Refuses the appointment;
• Has a conflict of interest;
• Becomes unable to act;
• Cannot complete the proceeding.

A clause that depends completely on one specifically named person may create unnecessary disputes concerning whether the arbitration agreement survives that person’s unavailability.

Appointment of a Three-Member Tribunal

Under the default domestic procedure, each party appoints one arbitrator, and the two party-appointed arbitrators select the third arbitrator, who serves as chair.

If a party fails to appoint its arbitrator within one month of receiving the other party’s request, or if the two co-arbitrators fail to agree on the chair within one month of their appointment, the competent court makes the required appointment.

Under the International Arbitration Law, the equivalent default period is 30 days. The third arbitrator acts as the chair of the tribunal.

Under the ISTAC Rules:

• The claimant identifies its arbitrator in the request for arbitration;
• The respondent identifies its arbitrator in the answer;
• If either party fails to do so, the ISTAC Board makes the appointment;
• The two co-arbitrators select the chair;
• If they do not agree within 15 days after notification of their appointment, the Board appoints the chair.

A Party-Appointed Arbitrator Is Not a Party Representative

A common misunderstanding is that an arbitrator nominated by one party may protect that party’s commercial interests.

This is incorrect.

Every arbitrator has the same fundamental duties regardless of how the appointment was made. A party-appointed arbitrator must assess the case independently and must not receive private instructions from the nominating party.

Once appointed, the arbitrator’s duties are owed to the integrity of the arbitral process rather than to the party that selected him or her.

This principle also applies to:

• Co-arbitrators;
• The tribunal chair;
• Sole arbitrators;
• Emergency arbitrators;
• Non-lawyer arbitrators;
• Arbitrators appointed by a court or institution.

The 2024 IBA Guidelines provide that every arbitrator must be independent and impartial when accepting appointment and must remain so until the final award has been issued or the proceedings have otherwise ended.

Independence and Impartiality

Independence and impartiality are closely related but conceptually different.

Independence

Independence generally concerns objective relationships between the arbitrator and persons connected with the dispute.

Relevant relationships may involve:

• A party;
• An affiliated company;
• Counsel;
• A witness;
• An expert;
• A third-party funder;
• An insurer;
• A person with a direct economic interest in the award.

Financial, professional, family or business connections may create concerns about independence.

Impartiality

Impartiality concerns whether the arbitrator approaches the dispute without bias, prejudice or a predetermined position.

Possible indicators may include:

• Preferential treatment of one party;
• Statements showing prejudgment;
• Hostility towards a party or counsel;
• Refusal to consider one side’s evidence;
• Conduct suggesting that the result has already been decided.

An unfavourable procedural decision does not by itself establish partiality. Arbitrators must make decisions, and one party will often disagree with them.

The relevant question is whether the surrounding facts, viewed objectively, create justified doubts about the arbitrator’s ability to decide the case on its merits.

Objective and Subjective Tests

The 2024 IBA Guidelines distinguish between the test for disqualification and the test for disclosure.

For determining whether a conflict creates justified doubts, the Guidelines use an objective reasonable-third-person standard. Doubts are justified where a reasonable person with knowledge of the relevant facts would conclude that the arbitrator may be influenced by matters other than the merits of the case.

The disclosure standard is broader. The arbitrator should disclose facts that may create doubts in the eyes of the parties, even where the arbitrator personally believes that no disqualifying conflict exists.

This distinction is essential:

• A fact may require disclosure without requiring removal;
• Disclosure is not an admission of partiality;
• Failure to disclose does not automatically prove a conflict;
• The underlying relationship remains more important than the failure itself.

The IBA Guidelines expressly state that nondisclosure alone does not necessarily establish lack of independence or require disqualification.

Arbitrator’s Duty of Disclosure under Turkish Law

Article 417 of the Turkish Code of Civil Procedure requires a prospective arbitrator, before accepting the appointment, to disclose circumstances that would justify doubts concerning independence or impartiality.

The duty continues after appointment. If a new circumstance arises and the parties were not already informed, the arbitrator must disclose it without delay.

The International Arbitration Law contains a corresponding continuous disclosure obligation. A prospective arbitrator must disclose relevant circumstances before accepting office and must report later developments promptly.

Under the ISTAC Rules, an arbitrator must submit a signed declaration of independence and impartiality to the Secretariat within seven days after accepting the appointment and undertake to devote sufficient time to the proceeding.

Before and during the arbitration, the arbitrator must disclose in writing to the Secretariat any circumstances affecting, or reasonably capable of creating doubts about, independence or impartiality. The Secretariat communicates the disclosure to the parties, receives their views and submits the matter to the ISTAC Board.

The Duty to Investigate

An arbitrator should not limit disclosure to matters that happen to be remembered immediately.

The 2024 IBA Guidelines state that arbitrators should conduct a reasonable investigation into relevant and reasonably available information. The parties must also provide information concerning their identities, affiliates, counsel and persons with a direct economic interest in the award so that meaningful conflict checks can be conducted.

A proper conflict check may include:

• All parties and affiliates;
• Parent and subsidiary companies;
• Directors and controlling individuals;
• Counsel teams;
• Experts and key witnesses;
• Insurers;
• Third-party funders;
• Persons obliged to indemnify a party for the award.

The disclosure process is a shared responsibility. An arbitrator cannot investigate a connection with an affiliate that the party never identified.

Common Conflicts of Interest

Previous work for a party

A potential conflict may arise where the arbitrator previously:

• Acted as counsel for a party;
• Advised the party;
• Provided an expert opinion;
• Served as arbitrator in a connected dispute;
• Conducted professional work for an affiliate.

The relevance depends on factors such as:

• How recently the work was performed;
• Its financial importance;
• Whether it concerned the present dispute;
• Whether the relationship is continuing;
• Whether the arbitrator obtained confidential information.

A historical and minor relationship may require disclosure without requiring disqualification. Recent or substantial involvement may create more serious concerns.

Current relationship with a party

An arbitrator should not ordinarily accept appointment where the arbitrator or the arbitrator’s firm currently represents one of the parties in a material matter.

A current financial or professional relationship may create justified doubts even where the arbitrator is personally uninvolved in the representation.

The analysis should consider the economic structure of the professional organisation rather than only the arbitrator’s personal file list.

Prior involvement in the dispute

A serious conflict may arise where the proposed arbitrator previously:

• Gave legal advice on the dispute;
• Prepared an expert opinion concerning the claim;
• Negotiated the contested contract;
• Participated in settlement discussions;
• Served as mediator in the same dispute;
• Acted as a witness concerning relevant events.

The IBA Guidelines classify an arbitrator’s prior advice or expert opinion on the same dispute among serious conflict situations requiring particularly careful treatment.

Financial interest

An arbitrator should disclose any direct or material indirect financial interest in:

• A party;
• An affiliate;
• The transaction;
• The outcome of the arbitration.

Examples may include substantial share ownership, contractual payment linked to the outcome or another economic relationship capable of affecting the arbitrator’s judgment.

Minor holdings through a diversified investment fund may be treated differently from direct ownership in a party.

Family and close personal relationships

A family or close personal relationship with:

• A party;
• A senior manager;
• Counsel;
• A witness;
• An expert

may require disclosure and, depending on its closeness and importance, may support a challenge.

The correct analysis is factual. Social acquaintance is not automatically equivalent to a close personal relationship.

Relationship with counsel

Conflicts may arise where the arbitrator:

• Works in the same firm as counsel;
• Has a continuing professional partnership with counsel;
• Has repeatedly served as co-counsel with counsel;
• Has recently appointed counsel as arbitrator in another case;
• Has been appointed repeatedly by the same lawyer or firm.

Professional familiarity alone does not establish partiality. International arbitration is a specialised field, and the same individuals may encounter each other in different professional roles. The frequency, financial significance and closeness of the relationship remain relevant.

Repeated appointments

Repeated appointment of the same arbitrator by one party or law firm may create an appearance that the arbitrator has become economically dependent or has developed access to information relevant to a series of disputes.

The 2024 IBA Guidelines include specified forms of repeated appointment within the Orange List, while recognising that practices may differ in specialised sectors involving relatively small pools of experienced arbitrators.

The analysis should consider:

• Number of appointments;
• Time period;
• Similarity of disputes;
• Percentage of the arbitrator’s work;
• Whether disclosures were made;
• Sector-specific practice.

Issue conflicts and prior legal opinions

An arbitrator may previously have written an academic article or delivered a lecture concerning a legal question that also arises in the arbitration.

A general legal opinion does not usually establish partiality. The 2024 IBA Guidelines place general academic or public opinions concerning a legal issue within the Green List where the opinion is not focused on the specific case.

The position may be different where the arbitrator:

• Has publicly addressed the specific dispute;
• Has already expressed a concluded view on a central contested fact;
• Has acted as counsel in an identical factual dispute;
• Has committed publicly to an outcome regardless of the evidence.

The distinction is between general legal expertise and prejudgment of the actual case.

The IBA Traffic-Light Lists

The 2024 IBA Guidelines use four practical categories.

Non-Waivable Red List

These situations involve conflicts so serious that party consent cannot cure them.

The underlying principle is that no person should act as a judge in his or her own cause. A direct identity between arbitrator and party, or a direct controlling financial interest in the outcome, may fall within this category.

Waivable Red List

These situations involve serious conflicts, but fully informed parties may expressly agree that the person may serve.

Ordinary silence is insufficient. The parties must understand the conflict and provide an express waiver.

Orange List

The Orange List contains circumstances that may create doubts in the eyes of the parties and should ordinarily be disclosed.

Examples concern certain prior services, repeated appointments, relationships with counsel and other circumstances requiring factual evaluation.

An Orange List situation does not automatically justify a challenge. It identifies a matter requiring transparency and case-specific analysis.

Green List

The Green List contains circumstances that ordinarily create no appearance of conflict and need not be disclosed.

Examples may include general legal opinions expressed in academic publications or lectures that are not focused on the dispute.

The lists are illustrative rather than exhaustive. The General Standards remain the primary source for evaluating independence, impartiality and disclosure. The Guidelines are soft law and do not override Turkish legislation, the applicable institutional rules or the parties’ binding agreement.

Grounds for Challenging an Arbitrator under Turkish Law

Under Article 417 of the Code of Civil Procedure, an arbitrator may be challenged where:

• The arbitrator lacks a qualification agreed by the parties;
• A challenge ground established by the agreed arbitration procedure exists;
• Circumstances justify doubts concerning impartiality;
• Circumstances justify doubts concerning independence.

A party may challenge an arbitrator that it appointed, or whose appointment it participated in, only on the basis of facts learned after the appointment.

This restriction prevents a party from appointing an arbitrator despite a known relationship and later using the same known fact strategically after the case develops unfavourably.

The International Arbitration Law adopts corresponding grounds for international arbitration.

Challenge Procedure in Domestic Arbitration

The parties may agree on their own challenge procedure.

In the absence of a different arrangement, a party seeking to challenge an arbitrator must act within two weeks after:

• The tribunal was constituted; or
• The party learned of the circumstances supporting the challenge.

The challenge must be communicated in writing to the other party.

If the challenged arbitrator does not withdraw and the other party does not accept the challenge, the tribunal decides the request.

Where the challenge is rejected, the challenging party may apply to the competent court within one month after learning of the rejection and request both annulment of the tribunal’s rejection and removal of the arbitrator.

A request challenging the sole arbitrator, the entire tribunal or enough members to eliminate the decision-making majority must be submitted directly to the competent court.

Challenge Procedure in International Arbitration

Under the International Arbitration Law, the parties may determine the challenge procedure.

The statutory default requires the challenging party to act within 30 days after appointment or discovery of the relevant circumstances. If the tribunal rejects the challenge, the party may apply to the competent Turkish court within a further 30 days.

A challenge against the sole arbitrator, the entire tribunal or enough arbitrators to remove the tribunal’s decision-making majority must be taken directly to the competent court.

The difference between the domestic two-week period and the international 30-day period is important. Counsel should identify the applicable arbitration law before calculating the deadline.

Challenge Procedure under the ISTAC Rules

Under Article 16 of the ISTAC Rules, an arbitrator may be challenged where:

• The arbitrator lacks qualifications agreed by the parties;
• Circumstances create justified doubts concerning independence or impartiality;
• Another reason prevents proper performance of the arbitrator’s duties.

The challenging party must submit a written statement to the Secretariat explaining the relevant facts.

The request must be filed within 30 days after notification of the arbitrator’s appointment or within 30 days after the challenging party learns of the relevant circumstances at a later stage.

The Secretariat sends the request to:

• The challenged arbitrator or tribunal;
• The other party.

They are given a period not exceeding 15 days to submit written observations.

If the arbitrator does not withdraw and all parties do not agree on removal, the ISTAC Board decides the challenge. If accepted, the arbitrator’s mandate ends.

The ISTAC Rules state that Board decisions concerning appointment, challenge and replacement are final within the institutional framework and that reasons are not disclosed. Where Türkiye is the seat, the effect of an institutional decision must also be considered together with any court-review mechanism preserved by the applicable Turkish arbitration statute.

Disclosure Does Not Equal Disqualification

Parties sometimes treat a disclosure as evidence that the arbitrator should be removed.

That approach is incorrect.

An arbitrator may disclose a relationship precisely because transparency is required, even though the relationship does not create an objective conflict.

For example, disclosure may be appropriate where:

• The arbitrator met counsel at a professional conference;
• The arbitrator served with counsel on an academic committee;
• The arbitrator acted in a previous unrelated case involving an affiliate;
• The arbitrator received a prior appointment from the same firm.

The party should evaluate:

• Nature of the relationship;
• Timing;
• Frequency;
• Financial importance;
• Connection with the dispute;
• Risk of access to confidential information.

A challenge should not be filed merely because a disclosure was made.

Failure to Disclose

Failure to disclose may be relevant but is not automatically decisive.

The central question remains whether the undisclosed facts objectively create justified doubts about impartiality or independence.

A minor relationship may have been disclosable but still insufficient for removal. Conversely, a serious undisclosed financial or professional connection may support both a challenge and a later attack on the award.

The 2024 IBA Guidelines expressly separate disclosure failure from the existence of a conflict. Only the underlying facts can ultimately establish the lack of independence or impartiality.

Waiver of the Right to Challenge

A party must raise known objections promptly.

Under Article 409 of the Code of Civil Procedure, where a party continues the arbitration without objecting within two weeks after learning of a waivable procedural non-compliance, the party is treated as having waived the objection unless another period was agreed.

The specific challenge deadline under Article 418 must also be respected.

The 2024 IBA Guidelines use a 30-day period for waiver of disclosed or reasonably discoverable potential conflicts, subject to the special rules concerning non-waivable and expressly waivable conflicts. This soft-law period does not replace the shorter or different statutory deadline applicable to a Turkey-seated arbitration.

A party should therefore:

1. Record the date on which the relevant facts were learned;
2. Conduct the required investigation promptly;
3. Identify the applicable statute and rules;
4. Submit a reasoned challenge within the shortest potentially applicable period.

Waiting to see how the tribunal decides a procedural application may result in loss of the right to object.

Evidence Supporting a Challenge

A challenge should be supported by concrete facts rather than suspicion.

Potential evidence includes:

• Corporate registry records;
• Law firm engagement information;
• Public professional biographies;
• Prior arbitral appointments;
• Published awards or decisions;
• Financial disclosures;
• Professional partnership records;
• Public statements;
• Correspondence.

The challenge should explain:

• The relevant relationship;
• When it began;
• Whether it continues;
• Its connection with the dispute;
• When the challenging party discovered it;
• Why it creates objectively justified doubts.

A speculative allegation may damage the credibility of the challenging party and delay the arbitration unnecessarily.

Tactical or Abusive Challenges

The challenge mechanism protects the integrity of arbitration. It should not be used to:

• Delay the hearing;
• Disrupt an unfavourable tribunal;
• Pressure an arbitrator;
• Obtain access to confidential information;
• Re-litigate procedural decisions;
• Create a basis for a later annulment action.

A challenge based solely on adverse procedural decisions will generally be weak unless the decisions form part of a broader pattern demonstrating unequal treatment or prejudgment.

Counsel should distinguish between:

• A legal error;
• A procedural disagreement;
• Actual bias;
• An appearance of justified partiality.

Multi-Party Arbitrator Appointment

Multi-party arbitration creates particular appointment difficulties.

Where several claimants or respondents must appoint one co-arbitrator jointly, they may have different interests. Respondents may all oppose the claimant while blaming one another for the alleged loss.

Under the ISTAC Rules, multiple claimants or multiple respondents must agree jointly on their side’s arbitrator. If they cannot agree, the ISTAC Board appoints the arbitrator for that side.

The purpose is to preserve equality in tribunal constitution. Allowing every individual party to appoint one arbitrator would distort the agreed tribunal size.

Multi-party arbitration clauses should regulate:

• Joint nomination;
• Failure to agree;
• Institutional appointment;
• Appointment of the chair;
• Consolidated proceedings;
• Joinder of additional parties.

Arbitrator Availability

Independence and technical expertise are not sufficient where the arbitrator lacks time to conduct the case.

The candidate should disclose:

• Existing hearings;
• Long-term commitments;
• Conflicting procedural schedules;
• Expected availability;
• Ability to issue the award within the applicable period.

Under the ISTAC Rules, an arbitrator must undertake to devote sufficient time to the arbitration, and the Board considers whether a candidate has the competence and availability necessary to conduct the proceedings.

Parties may ask candidates for an availability statement before finalising the appointment, provided the communication does not address the merits of the dispute.

Permissible Pre-Appointment Communications

Before appointment, counsel may communicate with a prospective arbitrator concerning matters such as:

• Availability;
• Qualifications;
• Language ability;
• Experience;
• Conflicts;
• Fee expectations in ad hoc arbitration;
• General procedural approach.

Counsel should not discuss:

• Detailed merits;
• Evidence;
• Likely outcome;
• Preferred interpretation of the contract;
• Strategy against the opposing party.

The safest practice is to keep the communication limited, written or carefully recorded and consistent with the applicable institutional procedure.

Arbitrator Interviews

Interviews may be useful in high-value or technically complex disputes, but they should not become private advocacy sessions.

A structured interview may address:

• Sector experience;
• Procedural availability;
• Language;
• Familiarity with the governing law;
• Experience managing experts;
• Conflict disclosures.

The same general questions should ideally be asked of each candidate.

Counsel should preserve a record showing that no substantive discussion of the merits occurred.

Arbitrator Replacement

When an arbitrator’s mandate ends because of:

• Successful challenge;
• Resignation;
• Agreement of the parties;
• Death;
• Legal incapacity;
• Practical inability to perform;
• Institutional removal,

a replacement may be required.

Under Article 421 of the Code of Civil Procedure, a substitute arbitrator is selected through the same procedure used for the original appointment. The period required for replacement is excluded from the domestic statutory arbitration period.

Under the ISTAC Rules, the replacement is normally selected through the original appointment method. The tribunal decides whether earlier procedural stages should be repeated and to what extent.

If replacement occurs after the evidentiary phase has closed, the ISTAC Board may decide, after considering the parties’ and remaining arbitrators’ views, that the remaining tribunal members should complete the arbitration without appointing a substitute.

Effect of Naming Arbitrators in the Arbitration Agreement

Naming a specific arbitrator in the contract may appear efficient, but it creates risk.

Under the domestic statutory framework, if the arbitration agreement identifies the arbitrator or tribunal members by name and the mandate of the sole arbitrator, the entire tribunal or enough members to remove the decision-making majority ends, the arbitration may also end rather than continuing through ordinary replacement. Where the agreement does not name the arbitrators, a replacement procedure is generally available.

It is therefore usually safer to define:

• Required qualifications;
• Appointment mechanism;
• Institution;
• Replacement procedure

rather than naming individuals who may be unavailable years later.

Arbitrator Resignation

An arbitrator may resign where:

• A conflict arises;
• Health prevents continued service;
• Professional duties make timely performance impossible;
• The arbitrator doubts the ability to remain impartial;
• The parties agree on replacement.

Resignation does not necessarily mean that the challenge allegations were valid.

Both the Code of Civil Procedure and the International Arbitration Law provide that withdrawal, or the other party’s agreement to termination of the mandate, does not constitute an admission that a challenge ground existed.

Liability of Arbitrators

Under Article 419 of the Code of Civil Procedure, unless the parties agreed otherwise, an arbitrator who accepts office but refuses without a justified reason to perform the duty may be required to compensate the loss caused to the parties.

The International Arbitration Law contains a corresponding rule.

This provision concerns unjustified refusal to perform. It should not be interpreted as creating ordinary liability merely because one party believes that the award is legally wrong.

The independence of arbitral decision-making would be undermined if arbitrators faced routine damages claims for every disputed legal conclusion.

Challenge and the Final Award

A party that learns of a conflict during the proceedings should use the challenge procedure promptly.

It should not remain silent, wait for the final award and raise the same known matter only after losing.

Where an arbitrator was improperly selected or the agreed appointment procedure was materially violated, the issue may later support an annulment application.

Article 439 of the Code of Civil Procedure permits annulment where, among other matters:

• The tribunal was not selected according to the agreed or statutory procedure;
• The arbitration was not conducted according to the agreed or statutory procedure and the irregularity affected the award;
• Equality or the right to be heard was not respected;
• The award violates public policy.

Not every unsuccessful challenge results in annulment. The court does not normally conduct a complete rehearing of the dispute.

Independence Issues at the Enforcement Stage

A foreign arbitral award may also face resistance at the enforcement stage where the tribunal’s composition or procedure was inconsistent with:

• The parties’ agreement;
• The law of the seat;
• Fundamental due-process requirements.

The enforcing court will not ordinarily reconsider the merits merely because the losing party disagrees with the arbitrators.

However, serious undisclosed conflicts, improper appointment or denial of an effective opportunity to challenge the tribunal may contribute to an enforcement objection.

A properly documented appointment and disclosure process therefore protects not only the arbitration but also the enforceability of the award.

Drafting an Effective Appointment Clause

An arbitration clause may provide:

Any dispute arising out of or in connection with this Agreement shall be finally resolved under the Istanbul Arbitration Centre Arbitration Rules.

The tribunal shall consist of three arbitrators. Each party shall nominate one arbitrator, and the two co-arbitrators shall nominate the chair. The seat of arbitration shall be Istanbul, Türkiye, and the language shall be English.

The parties may add qualifications such as:

At least one member of the tribunal shall have substantial experience in international construction disputes.

Qualification requirements should not be excessively restrictive.

A clause requiring an arbitrator who simultaneously:

• Has 25 years of experience;
• Speaks three uncommon languages;
• Is qualified in two specified jurisdictions;
• Has never acted for any company in the sector;
• Is available immediately

may make appointment impossible.

The clause should permit the institution or court to resolve deadlock.

Practical Appointment Checklist

Before nominating an arbitrator, counsel should consider:

1. Which arbitration law applies;
2. Which institutional rules apply;
3. Whether the case requires a sole arbitrator or tribunal;
4. Which qualifications are contractually required;
5. Whether the candidate is legally eligible;
6. The candidate’s experience with the governing law;
7. Sector knowledge;
8. Working-language ability;
9. Availability;
10. Prior relationships with parties and affiliates;
11. Relationships with counsel;
12. Prior appointments;
13. Financial interests;
14. Public statements concerning the dispute;
15. Relationships with funders or insurers;
16. Whether a disclosure is required;
17. Whether multi-party appointment issues exist;
18. Whether the candidate can complete the case on time;
19. Whether replacement provisions are workable;
20. Whether the appointment process will withstand annulment and enforcement review.

Frequently Asked Questions

How many arbitrators are appointed under Turkish law?

The parties are free to agree on an odd number. Under the domestic and international statutory default rules, three arbitrators are appointed if no number was agreed.

Can a company act as arbitrator?

No. The Turkish statutory frameworks require arbitrators to be natural persons.

Must every arbitrator be a lawyer?

Not necessarily. In domestic arbitration involving more than one arbitrator, at least one tribunal member must be a lawyer with at least five years of professional seniority. The parties may appoint technical or commercial specialists as the other members, subject to the agreement and applicable rules.

Who selects the sole arbitrator under the ISTAC Rules?

The parties select the sole arbitrator jointly. If they do not agree within the applicable period, the ISTAC Board appoints the arbitrator.

Is a party-appointed arbitrator allowed to favour the appointing party?

No. Every arbitrator must remain independent and impartial regardless of the method of appointment.

What must an arbitrator disclose?

An arbitrator must disclose circumstances that may create justified doubts concerning independence or impartiality, both before accepting the appointment and throughout the proceedings.

Does disclosure mean that the arbitrator must withdraw?

No. A matter may require disclosure without creating an objective ground for removal.

Does failure to disclose automatically invalidate the appointment?

No. The underlying facts must be assessed. Nondisclosure may be relevant, but it does not automatically prove partiality or lack of independence.

How long does a party have to challenge an arbitrator in domestic arbitration?

Under the statutory default procedure, the request must be made within two weeks after constitution of the tribunal or discovery of the relevant circumstances.

How long is the challenge period under the International Arbitration Law?

The statutory default period is 30 days after appointment or discovery of the relevant circumstances.

What is the challenge period under the ISTAC Rules?

A challenge must be filed within 30 days after notification of appointment or later discovery of the challenge ground.

Who decides an ISTAC challenge?

If the challenged arbitrator does not withdraw and all parties do not agree on removal, the ISTAC Board decides the challenge.

Can a party challenge its own appointed arbitrator?

Yes, but only on the basis of circumstances learned after the appointment.

Are the IBA Guidelines legally binding?

Not automatically. They are an influential soft-law instrument and do not override applicable Turkish law, institutional rules or binding agreements.

What is the Orange List?

It identifies circumstances that may create doubts in the eyes of the parties and should generally be disclosed. The existence of an Orange List circumstance does not automatically require removal.

Can an arbitrator’s academic article create a conflict?

A general academic opinion on a legal issue will not usually create a conflict. A statement specifically prejudging the parties’ dispute may require a different assessment.

Can an arbitrator be replaced after a successful challenge?

Yes. The replacement is normally selected through the same procedure as the original arbitrator, subject to the applicable statute and institutional rules.

Can an award be annulled because of an improper appointment?

Potentially. Article 439 permits annulment where the tribunal was not selected according to the agreed or statutory procedure.

Conclusion

Arbitrator appointment and challenge in Turkey require careful attention from the moment the arbitration clause is drafted until the final award is issued.

The parties’ ability to select the tribunal is one of arbitration’s greatest advantages. It allows disputes to be decided by individuals with suitable legal, technical, linguistic and commercial experience.

That freedom is subject to fundamental safeguards.

Every arbitrator must remain:

• Independent;
• Impartial;
• Available;
• Properly qualified;
• Transparent concerning potential conflicts.

A party-appointed arbitrator is not an advocate. The same standards apply to sole arbitrators, co-arbitrators and tribunal chairs.

Turkish domestic arbitration law and the International Arbitration Law both impose continuous disclosure duties. The ISTAC Rules supplement those duties through a signed independence and impartiality declaration and an institutional procedure for reviewing disclosed circumstances.

The 2024 IBA Guidelines provide additional practical guidance. Their objective reasonable-person test helps assess whether a conflict justifies removal, while the broader disclosure test promotes transparency.

The Red, Orange and Green Lists should not be applied mechanically. The underlying General Standards and the facts of the particular case remain decisive.

The distinction between disclosure and disqualification is especially important. A disclosure does not mean that the arbitrator is biased. Similarly, failure to disclose does not automatically establish a disqualifying conflict, although serious nondisclosure may affect the assessment of the underlying relationship.

Challenge deadlines must be monitored carefully.

Domestic arbitration generally uses a two-week statutory challenge period. International Arbitration Law and the ISTAC Rules generally use 30-day periods. A party that continues without timely objection may lose the right to rely on a known circumstance.

Arbitration clauses should provide a workable appointment process. They should determine:

• Number of arbitrators;
• Institution;
• Appointment method;
• Required qualifications;
• Multi-party procedure;
• Replacement mechanism.

Naming individual arbitrators in the contract may create difficulties if those persons later become unavailable. Defining qualifications and using an institutional appointment mechanism is generally more resilient.

A properly managed appointment process protects the fairness of the arbitration and the enforceability of the resulting award. An improperly constituted tribunal may create jurisdictional disputes, procedural delay, annulment applications and enforcement risk.

For Turkish and international businesses, specialised arbitration counsel can assist with candidate selection, conflict investigations, disclosure analysis, challenge applications, institutional procedures, court applications and protection of the final award.