Arbitration Costs in Turkey: Tribunal Fees, Legal Expenses and Cost Allocation

Arbitration costs in Turkey are a central consideration for companies, investors, contractors, shareholders and commercial parties deciding whether to commence, defend or settle an arbitration.

Although arbitration may offer confidentiality, procedural flexibility, specialist decision-makers and international enforceability, it is not free from financial risk. The parties may need to pay arbitrator fees, institutional administrative charges, lawyers, technical experts, translators, witnesses, hearing providers and court-related expenses.

The total cost of arbitration depends on several factors, including:

• The value of the dispute;
• The number of arbitrators;
• Whether the case is institutional or ad hoc;
• The complexity of the legal and factual issues;
• The number of witnesses and experts;
• The language of the arbitration;
• The volume of documentary evidence;
• Whether physical hearings are required;
• Whether interim measures are requested;
• Whether annulment or enforcement proceedings follow.

Cost planning should therefore begin before the request for arbitration is filed.

A claimant should assess whether the expected recovery justifies the projected expenditure. A respondent should consider the likely cost of defending the claim, advancing counterclaims and satisfying any advance requested by the tribunal or administering institution.

Where Turkey is the seat and the dispute has the required foreign element, International Arbitration Law No. 4686 regulates the principal cost rules. Article 16 addresses arbitrator remuneration, categories of arbitration expenses, advances and allocation of costs between the parties. It generally places costs on the unsuccessful party unless the parties have agreed otherwise and requires proportional allocation where each party succeeds only in part.

Institutional arbitration is also affected by the applicable institution’s rules and fee schedules. For proceedings administered by the Istanbul Arbitration Centre, commonly known as ISTAC, the parties must consider the registration fee, administrative costs, arbitrator fees and advances fixed under the ISTAC framework.

This article explains the principal categories of arbitration costs in Turkey, the current ISTAC fee structure, ad hoc arbitrator remuneration, legal and expert expenses, advance payments, cost allocation and practical methods for controlling expenditure.

Why Arbitration Cost Planning Matters

A commercially justified claim can become uneconomic if the legal and procedural expenses are disproportionate to the realistic recovery.

The face value of a claim should not be confused with its expected recoverable value. A party should evaluate:

• The probability of success;
• Possible counterclaims;
• Contractual liability caps;
• Evidence available;
• Debtor solvency;
• Asset location;
• Time required for enforcement;
• Interest and cost recovery;
• Settlement possibilities.

For example, a high-value claim against an insolvent company may have less commercial value than a smaller claim against a solvent multinational business.

The parties should also distinguish between the amounts they must pay during the arbitration and the amounts they may eventually recover through the award.

Even where the tribunal ultimately orders the respondent to reimburse costs, the claimant may be required to finance the proceedings for months or years before any recovery occurs.

Main Categories of Arbitration Costs in Turkey

The principal categories are:

1. Arbitrator or tribunal fees;
2. Institutional registration and administrative expenses;
3. Lawyers’ fees and expenses;
4. Party-appointed expert fees;
5. Tribunal-appointed expert fees;
6. Witness and travel expenses;
7. Hearing and technology costs;
8. Translation and interpretation expenses;
9. Document-production and electronic-disclosure expenses;
10. Court fees connected with arbitration;
11. Recognition, enforcement and annulment costs.

Article 16 of International Arbitration Law No. 4686 expressly identifies arbitrator fees, arbitrator expenses, tribunal-appointed expert expenses, inspection costs, approved witness expenses, attorney fees calculated under the applicable minimum tariff, court fees and notification expenses as arbitration costs.

Institutional rules may use a broader formulation. The ISTAC Arbitration Rules treat legal representation, party-appointed experts and other expenses incurred by the parties during the proceedings as part of the arbitration-cost framework.

Institutional Arbitration and Ad Hoc Arbitration

The method used to determine tribunal fees depends significantly on whether the arbitration is institutional or ad hoc.

Institutional Arbitration

In institutional arbitration, the institution normally publishes fee schedules or establishes a method for calculating:

• Registration fees;
• Administrative costs;
• Arbitrator fees;
• Advances;
• Additional services.

The institution may also administer payments, request additional advances and decide the arbitrators’ final remuneration.

ISTAC follows an amount-in-dispute system under which the administrative expenses and tribunal fees are calculated by applying progressive percentages and fixed amounts to the monetary value of the claims.

Ad Hoc Arbitration

In ad hoc arbitration, no permanent institution administers the case unless the parties appoint an institution for limited functions.

The parties may agree directly with the arbitrators on:

• Hourly rates;
• Daily hearing rates;
• Fixed fees;
• Stage-based payments;
• Another calculation system.

If the parties and arbitrators cannot agree, and the arbitration agreement does not incorporate institutional or internationally established fee rules, the annual tariff prepared under Article 16 of Law No. 4686 applies.

Arbitrator Fees under International Arbitration Law No. 4686

Article 16 provides that, unless the parties agree otherwise, arbitrator remuneration is determined by considering:

• The amount claimed;
• The nature of the dispute;
• The duration of the proceedings.

The parties may also determine remuneration by referring to institutional arbitration rules or internationally established rules.

Where no agreement or incorporated fee mechanism exists, the annual International Arbitration Fee Tariff applies.

The law also provides that, unless otherwise agreed, the chair of a three-member tribunal receives 10% more than the fee payable to each other arbitrator. Correction, interpretation and completion of the award do not result in an additional arbitrator fee under the statutory default system.

The 2026 International Arbitration Fee Tariff

The 2026 International Arbitration Fee Tariff was published in the Official Gazette on 26 March 2026 and applies where the parties have not agreed on the arbitrators’ remuneration and have not incorporated institutional or established international fee rules.

The tariff applies progressive percentages to the value of the dispute. For a sole arbitrator, the applicable rates begin at 5% for the first TRY 500,000 and decrease in stages. For a tribunal of three or more arbitrators, the first-band rate is 8%, followed by progressively lower percentages. Amounts above TRY 10 million are subject to rates of 0.1% for a sole arbitrator and 0.2% for a tribunal of three or more arbitrators.

The tariff also regulates situations in which the proceedings end before a final award.

Depending on when the case ends and the reason for termination, the arbitrators may receive:

• No fee;
• One-quarter of the tariff fee;
• Half of the tariff fee;
• The full tariff fee.

For example, where the dispute ends through settlement, waiver or loss of subject matter before the deadline for evidence has been given, half of the tariff fee is payable. If the same event occurs after that procedural stage, the full fee is payable. The tariff additionally regulates partial awards and the reappointment of an arbitrator after annulment.

The tariff in force on the date of the decision is used to determine the arbitrator’s remuneration.

ISTAC Registration Fee

A claimant commencing ISTAC arbitration must pay the applicable registration fee.

As of 5 August 2026, the ISTAC schedule lists the registration fee as TRY 1,000 for monetary disputes across the published value bands. The registration fee initiates the institutional process and is separate from the full advance required for administrative costs and arbitrator remuneration.

ISTAC’s public filing guidance requires the claimant to submit the request for arbitration or statement of claim, the arbitration agreement and the registration payment.

The parties should verify the current scale immediately before filing because fee schedules may be amended.

ISTAC Administrative Costs

Administrative costs compensate the institution for administering the proceedings.

These functions may include:

• Receiving and transmitting submissions;
• Maintaining the case file;
• Supporting tribunal constitution;
• Managing arbitrator confirmations and challenges;
• Calculating advances;
• Communicating procedural decisions;
• Administering payments;
• Providing institutional support.

The current ISTAC administrative-cost schedule is based on the value of the dispute.

As of 5 August 2026:

• For disputes up to TRY 1 million, administrative costs are calculated at 1.6%;
• For higher-value disputes, fixed amounts and decreasing percentages apply;
• For disputes exceeding TRY 3 billion, the published administrative cost is capped at TRY 2,026,000 under the displayed schedule.

ISTAC’s calculator also states that administrative costs must not be lower than TRY 1,000.

These figures cover institutional administration, not the parties’ lawyers, experts or hearing expenses.

ISTAC Arbitrator Fees

ISTAC calculates arbitrator fees separately from administrative costs.

For disputes up to TRY 1 million, the published scale provides:

• 5% for a sole arbitrator;
• 7% for an arbitral tribunal.

For higher-value disputes, fixed amounts and progressively decreasing percentages apply. The published scale also states that the arbitrator fee may not be lower than TRY 5,000.

The amount displayed under the tribunal column concerns the fee of the tribunal as a whole under the institutional schedule rather than three separate applications of the sole-arbitrator percentage.

The number of arbitrators can nevertheless have a substantial effect on overall expenditure. A three-member tribunal is ordinarily more expensive than a sole arbitrator and may also increase:

• Travel expenses;
• Hearing coordination costs;
• Deliberation time;
• Scheduling complexity.

The choice should be proportionate to the value, complexity and strategic importance of the dispute.

Sole Arbitrator or Three-Member Tribunal?

A sole arbitrator is generally more economical.

It may be appropriate where:

• The amount in dispute is moderate;
• The legal issues are relatively focused;
• Speed is important;
• The parties want to reduce fees;
• No unusual technical complexity exists.

A three-member tribunal may be appropriate where:

• The amount in dispute is substantial;
• Several legal systems are involved;
• The case requires technical and financial expertise;
• The parties want broader decision-making experience;
• The dispute has significant long-term consequences.

Parties drafting an arbitration clause may use a monetary threshold. For example, disputes below an agreed value may be assigned to a sole arbitrator, while larger disputes are referred to three arbitrators.

The clause should explain whether counterclaims, interest and non-monetary relief are included when applying the threshold.

Determining the Amount in Dispute

Institutional fees generally depend on the monetary value of the claims.

The amount in dispute may include:

• Principal claims;
• Counterclaims;
• Set-off claims;
• Declaratory claims with monetary value;
• Interest, depending on the applicable rules;
• Other quantified relief.

Where the claimant increases its demand, the institution may increase the advance.

A substantial counterclaim may also increase the overall amount used for cost calculations.

Parties should therefore avoid artificially understating or inflating their claims. An unsupported high-value claim may increase institutional and legal expenses without improving the realistic recovery.

Non-Monetary Claims

Some arbitration claims cannot be valued easily.

Examples include requests for:

• Contractual performance;
• Delivery of documents;
• Transfer of shares;
• Declaratory relief;
• Protection of confidential information;
• Compliance with a non-compete provision;
• Corporate information rights.

The institution or tribunal may determine a reasonable value for cost purposes by considering the economic importance of the dispute.

The 2026 statutory fee tariff does not apply to matters that cannot be valued in money. Where no agreement exists in such a case, the parties and tribunal should establish an appropriate fee arrangement.

Advance on Costs

The parties are commonly required to pay arbitration costs before the final award.

An advance protects the institution and tribunal from performing substantial work without payment.

Under Article 16 of Law No. 4686, the tribunal may ask the claimant to provide an advance for arbitration expenses. If the advance is not paid within the prescribed period, the tribunal may suspend the proceedings.

If payment is made within 30 days after the suspension is notified, the proceedings continue. If the advance remains unpaid, the arbitration terminates. After the award, the tribunal must provide an account showing how the advance was used and return any remaining amount to the payer.

Under ISTAC’s institutional system, the Secretariat may initially request an amount sufficient to cover costs until the terms of reference are completed. The Board then fixes the advance intended to cover the arbitrator fees, administrative costs and relevant expenses.

Who Pays the Advance?

The institution may require the parties to pay equal shares of the advance, subject to separate arrangements for claims and counterclaims.

However, payment of an advance is provisional. It does not determine who will ultimately bear the costs.

A claimant may pay more than its nominal share because the respondent refuses to contribute. The claimant may do so to prevent suspension or termination of the proceedings.

The claimant can then request that the tribunal order reimbursement in the final cost award.

A respondent should understand that refusing to pay an advance does not necessarily stop the arbitration. The claimant may pay the respondent’s share, continue the proceedings and seek repayment with the final award.

Failure to Pay an Advance

Failure to pay may produce serious procedural consequences.

Depending on the applicable rules, the tribunal or institution may:

• Suspend the relevant claim;
• Treat a claim or counterclaim as withdrawn;
• Terminate part of the proceedings;
• Terminate the entire arbitration.

A party should not assume that non-payment is an effective defence strategy.

If the opposing party pays the missing amount, the case may proceed while the non-paying party loses procedural credibility and may ultimately be ordered to reimburse the payment.

Funding arrangements and client budgets should therefore include contingency reserves for additional advances.

Lawyers’ Fees

Legal representation is often the largest category of arbitration expenditure.

Lawyers may charge through:

• Hourly rates;
• Fixed fees;
• Stage-based fees;
• Monthly retainers;
• Success fees;
• Mixed arrangements.

The total amount may depend on:

• Number of submissions;
• Document-production scope;
• Witness preparation;
• Expert coordination;
• Hearing duration;
• Interim applications;
• Jurisdictional objections;
• Settlement negotiations;
• Annulment and enforcement work.

A party should request a written engagement agreement identifying the scope of work, fee method, billing frequency and excluded services.

Recoverability of Lawyers’ Fees

The amount paid to counsel is not automatically the amount recoverable from the opposing party.

Article 16 of Law No. 4686 includes, among arbitration costs, the attorney fee determined by the tribunal for the successful party’s lawyer according to the applicable minimum attorney-fee tariff.

ISTAC’s institutional rules use broader language and include legal representation costs and other expenses incurred by the parties during the arbitration.

The interaction between the statutory wording, institutional rules and party agreement should therefore be addressed in the parties’ cost submissions.

A party seeking recovery should provide:

• Fee agreements where appropriate;
• Invoices;
• Payment records;
• Time records;
• Explanations of work performed;
• Evidence that the amount was reasonable and proportionate.

The tribunal may reject or reduce costs that are excessive, duplicative or unrelated to the arbitration.

Success Fees and Contingent Arrangements

A client and lawyer may agree on an outcome-related fee within the limits of the law governing the professional relationship.

However, a success fee does not automatically become recoverable from the losing party.

The tribunal may distinguish between:

• Reasonable legal expenditure necessary to conduct the case;
• A private risk-sharing arrangement between the client and lawyer;
• Third-party funding costs;
• A contractual premium payable only upon success.

Parties should not assume that every amount owed under their private legal-fee agreement will be shifted to the opponent.

Expert Fees

Expert evidence is common in:

• Construction arbitration;
• Energy disputes;
• M&A claims;
• Accounting disputes;
• Valuation cases;
• Technology disputes;
• Delay and disruption claims;
• Lost-profit assessments.

The parties may appoint their own experts, while the tribunal may appoint independent experts.

Article 16 of Law No. 4686 expressly includes tribunal-appointed expert expenses and inspection costs within the arbitration costs.

ISTAC’s rules additionally include the fees and expenses of party-appointed experts as well as other expenses incurred by the parties during the proceedings.

Expert fees may include:

• Reviewing records;
• Preparing reports;
• Reply reports;
• Expert meetings;
• Joint statements;
• Hearing preparation;
• Cross-examination attendance;
• Travel.

The expert’s instructions should define the budget, deliverables and approval required for work outside the agreed scope.

Witness Expenses

Witnesses of fact are not usually paid for the substance of their testimony, but they may incur:

• Travel;
• Accommodation;
• Visa expenses;
• Interpretation costs;
• Lost working time;
• Other necessary expenses.

Law No. 4686 includes witness travel and related expenses within arbitration costs to the extent approved by the tribunal.

A party should obtain approval before incurring unusually high witness expenses.

The tribunal may refuse to shift unnecessary luxury travel or disproportionate accommodation costs to the opposing party.

Translation and Interpretation Costs

Translation can become a major expense where:

• The contract is in Turkish;
• The arbitration language is English;
• Witnesses testify in another language;
• Financial records are extensive;
• Regulatory documents require certified translation;
• Enforcement documents must later be translated.

The parties may reduce costs by agreeing that:

• Certain documents need not be translated;
• Only relevant extracts will be translated;
• Informal translations may be used initially;
• Certified translations will be limited to critical evidence;
• Bilingual witnesses may testify without interpretation.

The arbitration language should be selected carefully at the contract-drafting stage.

Choosing a language unfamiliar to the documents and witnesses may substantially increase expenditure.

Hearing Costs

Physical hearings may require:

• Hearing rooms;
• Audio-visual equipment;
• Transcription;
• Interpretation booths;
• Catering;
• Travel;
• Hotels;
• Printing and hearing bundles;
• Technical staff.

Online hearings may reduce travel and venue costs but create other expenses involving:

• Video-conferencing platforms;
• Cybersecurity;
• Electronic bundles;
• Remote interpretation;
• Technical support;
• Digital transcription.

ISTAC’s Online Hearing Rules permit hearings through video conference or teleconference and allow technical support to be requested from the Secretariat.

The tribunal should select a hearing format that is proportionate to the dispute while preserving equality and the right to be heard.

Document Production and Electronic Evidence Costs

Document production can become one of the most expensive stages of international arbitration.

Expenses may include:

• Collection of emails;
• Server searches;
• Data processing;
• Document review;
• Privilege review;
• Redaction;
• Translation;
• Electronic hosting;
• Forensic examination.

Costs can be controlled by limiting:

• The relevant period;
• Custodians;
• Search terms;
• Document categories;
• Production rounds;
• Native-file requests.

Broad and speculative document requests increase both legal expenses and the risk of adverse cost treatment.

Court-Related Expenses

Even where the merits are arbitrated, Turkish courts may become involved in:

• Interim injunctions;
• Interim attachment;
• Arbitrator appointment;
• Arbitrator challenges;
• Evidence collection;
• Extension of the arbitration period;
• Setting-aside proceedings;
• Recognition and enforcement.

Article 16 expressly includes judicial fees paid for court applications under the International Arbitration Law within arbitration costs.

However, court proceedings may have their own cost-allocation rules and attorney-fee consequences.

The arbitration cost award should distinguish clearly between:

• Costs incurred within the arbitration;
• Costs already awarded by a court;
• Costs expected in future enforcement proceedings.

Cost Allocation: Does the Loser Pay?

The statutory starting point is that the unsuccessful party pays the arbitration costs unless the parties have agreed otherwise.

Where both parties succeed in part, costs are allocated according to their relative success. The cost ruling must also appear in decisions terminating the arbitration or recording a settlement.

This does not always mean that the losing party pays every amount requested by the winner.

The tribunal may examine:

• Overall success;
• Success on individual claims;
• Counterclaims;
• Reasonableness of expenses;
• Procedural conduct;
• Settlement;
• Proportionality.

A claimant recovering only a small percentage of an exaggerated claim may not receive full costs even if it obtains some monetary relief.

Relative Success

Relative success is not always a purely mathematical calculation.

The tribunal may consider:

• Amount claimed and amount awarded;
• Importance of non-monetary relief;
• Success on jurisdiction;
• Success on liability;
• Counterclaim outcome;
• Issues that consumed most of the hearing;
• Conduct affecting the duration of proceedings.

For example, a claimant may recover less money than requested but succeed on the central liability issue. A respondent may defeat most of the claim but lose an important counterclaim.

The parties should explain the practical significance of each result in their cost submissions.

Procedural Conduct and Costs

Under the ISTAC Rules, the tribunal may consider all relevant circumstances, including the nature of the dispute and the parties’ efforts to conduct the proceedings efficiently and economically.

Conduct that may affect allocation includes:

• Unnecessary jurisdictional objections;
• Repetitive submissions;
• Late evidence;
• Failure to comply with procedural orders;
• Excessive document requests;
• Refusal to cooperate with scheduling;
• Abandonment of weak claims;
• Failure to disclose material information;
• Unreasonable rejection of procedural efficiencies.

A party may win on the merits but receive reduced costs because it conducted the proceedings inefficiently.

Conversely, a party that behaved reasonably and narrowed the dispute may obtain a more favourable cost decision.

Settlement Offers and Costs

Settlement offers can affect cost strategy even where the applicable rules do not create a formal offer regime.

A party may submit a without-prejudice offer and later argue that the opponent acted unreasonably by continuing the arbitration and obtaining a less favourable result.

The tribunal should not review privileged settlement communications before deciding the merits.

The parties may therefore use a sealed or bifurcated procedure under which the offer is disclosed only during the cost phase.

The arbitration agreement or procedural order may expressly authorise the tribunal to consider settlement conduct when allocating costs.

Withdrawal, Settlement and Early Termination

An arbitration may end before the final award because:

• The claimant withdraws the claim;
• The parties settle;
• The dispute becomes moot;
• The tribunal lacks jurisdiction;
• An advance is not paid;
• Continuation becomes unnecessary or impossible.

Early termination does not mean that no arbitration costs are payable.

Under the 2026 statutory tariff, the stage at which the proceedings end may determine whether one-quarter, one-half or the full arbitrator fee is payable.

Under ISTAC rules, the Board determines institutional and arbitrator costs where the case ends before the final award, while allocation between the parties may be decided by the tribunal or through the applicable institutional process.

Settlement agreements should state:

• Who pays the arbitrators;
• Who pays ISTAC;
• Whether each party bears its own legal costs;
• Whether advances will be reimbursed;
• How unpaid invoices are handled.

Costs in Partial Awards

A tribunal may decide costs:

• In each partial award;
• By reserving all costs for the final award;
• Through an interim cost decision;
• By allocating costs relating to a particular procedural application.

The 2026 statutory tariff states that arbitrator remuneration for a partial award is determined according to the value of the dispute covered by that partial award. If the partial award also operates as the final award, the full tariff fee is payable.

The tribunal should avoid double counting when later determining the fees and costs connected with the remaining claims.

Security for Costs

Security for costs is different from an ordinary advance.

An advance finances the tribunal and institution. Security for costs protects a party against the risk that it will obtain a favourable award but be unable to recover its legal expenses from an insolvent opponent.

Law No. 4686 does not contain a separate detailed provision expressly establishing a general security-for-costs regime.

A request may therefore depend on:

• The arbitration agreement;
• Institutional rules;
• Tribunal powers;
• The financial circumstances;
• The requested measure’s character;
• Procedural fairness.

The tribunal should not order security merely because one party has limited resources.

Relevant factors may include:

• Evidence of inability to pay;
• Asset transfers;
• Insolvency;
• Third-party funding;
• Conduct intended to avoid payment;
• Strength and timing of the application;
• Effect on access to arbitration.

Third-Party Funding and Costs

A funder may pay:

• Lawyers;
• Experts;
• Institutional fees;
• Arbitrator fees;
• Security;
• Enforcement expenses.

The existence of funding does not automatically determine cost allocation.

The tribunal may need to consider whether:

• The funder covers adverse costs;
• Security is necessary;
• The funding return is recoverable;
• Disclosure is required;
• The funder controls expenditure.

A commercial funder’s success return is not expressly listed as a recoverable cost under Article 16 of Law No. 4686.

A funded party should therefore not assume that the opponent will reimburse the financing premium if the claim succeeds.

Costs of Annulment and Enforcement

Obtaining an award may not end the financial process.

The losing party may commence a setting-aside action in Turkey. The successful party may also need to pursue recognition and enforcement abroad.

Additional expenses may include:

• Court fees;
• Foreign counsel;
• Certified translations;
• Apostille or legalisation;
• Asset investigations;
• Enforcement officers;
• Local experts;
• Interim attachment.

A funding and litigation budget should include a post-award reserve.

The expected cost of enforcement may affect whether a settlement offer is commercially preferable to continued proceedings.

Reducing Arbitration Costs

Costs can be controlled without undermining procedural fairness.

Effective methods include:

• Selecting a sole arbitrator for suitable disputes;
• Choosing the arbitration language carefully;
• Using focused pleadings;
• Limiting document production;
• Avoiding repetitive expert reports;
• Using remote procedural meetings;
• Agreeing electronic service;
• Preparing a realistic procedural timetable;
• Narrowing undisputed issues;
• Using partial awards strategically;
• Considering mediation;
• Making early settlement offers;
• Monitoring the legal budget.

ISTAC also offers fast-track arbitration for qualifying smaller claims. Its public information states that the procedure currently applies to disputes not exceeding TRY 5 million and is intended to produce a final award through a sole arbitrator within three months.

The current version of the rules and monetary threshold should be verified when the arbitration begins.

Drafting the Arbitration Clause with Costs in Mind

The arbitration clause may influence future expenses substantially.

The parties should consider:

• Sole arbitrator or three-member tribunal;
• Monetary threshold;
• Institution;
• Seat;
• Language;
• Fast-track rules;
• Remote hearings;
• Cost allocation;
• Legal-fee recovery;
• Settlement offers;
• Security for costs;
• Third-party funding disclosure.

A sample clause may provide:

“Any dispute arising out of or relating to this Agreement shall be finally resolved by arbitration administered by the Istanbul Arbitration Centre under the ISTAC Arbitration Rules.

The seat shall be Istanbul, Türkiye, and the language shall be English. The tribunal shall consist of a sole arbitrator where the total amount in dispute does not exceed TRY 25,000,000 and three arbitrators where it exceeds that amount.

The tribunal may allocate all reasonable costs of arbitration, including institutional expenses, arbitrator fees, legal representation costs, expert expenses, translation costs, hearing expenses and other costs reasonably incurred for the proceedings, taking into account the parties’ relative success and procedural conduct.”

The wording should be reviewed for compatibility with mandatory Turkish law and the current institutional rules.

Practical Arbitration Budget Checklist

Before commencing arbitration, a party should estimate:

• Registration fee;
• Administrative costs;
• Arbitrator fees;
• Initial advance;
• Possible additional advance;
• Lawyers’ fees;
• Expert fees;
• Translation;
• Witnesses;
• Hearing costs;
• Technology and document hosting;
• Interim court applications;
• Security requirements;
• Annulment;
• Enforcement;
• Adverse-cost exposure.

The budget should include:

• Best-case scenario;
• Expected scenario;
• High-cost scenario;
• Settlement scenario;
• Enforcement scenario.

A responsible cost estimate should be updated after major procedural events.

Frequently Asked Questions

What costs are included in Turkish international arbitration?

They may include arbitrator fees, arbitrator expenses, tribunal-appointed experts, inspections, witness expenses, attorney fees, court charges and notification expenses. Institutional rules may also include party-appointed experts, legal representation and other costs incurred during the proceedings.

How are arbitrator fees determined?

The parties may agree directly, incorporate institutional rules or refer to established international rules. In the absence of an agreement, the annual tariff issued under Article 16 of Law No. 4686 applies.

What is the current ad hoc international arbitration tariff?

The 2026 tariff was published on 26 March 2026. It uses progressive percentages based on the dispute value and whether the case is heard by one arbitrator or three or more arbitrators.

How much is the ISTAC registration fee?

As of 5 August 2026, the published ISTAC schedule lists a TRY 1,000 registration fee. Current figures should always be verified before filing.

Are ISTAC administrative costs and arbitrator fees the same?

No. Administrative costs compensate ISTAC for administering the case. Arbitrator fees compensate the sole arbitrator or tribunal.

Is a three-member tribunal more expensive?

Generally, yes. The published ISTAC schedule provides separate and higher fee calculations for a tribunal than for a sole arbitrator.

Who initially pays the arbitration costs?

The institution or tribunal ordinarily requires advances during the proceedings. The payment arrangement does not determine the final allocation.

What happens if one party does not pay the advance?

The other party may pay the missing amount. If the required advance remains unpaid, the relevant proceedings may be suspended or terminated under the applicable law or institutional rules.

Does the losing party always pay all costs?

The statutory default places costs on the unsuccessful party, but partial success requires proportional allocation. The tribunal may also consider reasonableness and procedural conduct.

Can actual lawyers’ fees be recovered?

Recovery depends on the applicable law, rules, party agreement and tribunal assessment. Law No. 4686 expressly refers to attorney fees determined according to the minimum tariff, while ISTAC rules include legal representation costs more broadly.

Are expert fees recoverable?

Potentially. Tribunal-appointed expert expenses are expressly included under Law No. 4686, while ISTAC rules also recognise party-appointed expert costs.

Are translation expenses recoverable?

They may be claimed as expenses reasonably incurred for the arbitration, subject to the applicable rules and the tribunal’s assessment of necessity and proportionality.

Can the tribunal consider bad procedural conduct?

Yes. ISTAC rules permit the tribunal to consider the parties’ efforts to conduct the arbitration efficiently and economically when determining costs.

Are settlement costs lower?

Settlement may reduce future legal and hearing expenses, but arbitrator and institutional costs may still be payable. The amount may depend on the stage at which the case ends.

Are enforcement costs included in the original award?

Not necessarily. Costs incurred after the award may need to be claimed in enforcement proceedings or recovered under the law of the enforcement jurisdiction.

Conclusion

Arbitration costs in Turkey consist of more than arbitrator fees.

A complete budget must include institutional charges, legal representation, experts, witnesses, translations, hearings, technology, court applications and possible post-award enforcement.

International Arbitration Law No. 4686 establishes the central statutory framework. It permits parties to agree on arbitrator remuneration, incorporate institutional rules and request advances. It also provides that costs are ordinarily imposed on the unsuccessful party and divided according to relative success where both parties succeed in part.

In ad hoc proceedings without an agreed fee mechanism, the annual International Arbitration Fee Tariff becomes important. The 2026 tariff applies progressive percentages, regulates early termination and determines remuneration for partial awards.

ISTAC provides a more predictable institutional cost structure. Its published schedule identifies the registration fee, administrative expenses and separate scales for sole arbitrators and arbitral tribunals.

Predictability does not mean that the total cost can be calculated solely through the institutional scale.

In complex cases, lawyers and experts may represent the largest expenditure. Document production, translation, hearings and court proceedings can also exceed the institution’s administrative costs.

Cost recovery should not be assumed.

A successful party must prove that its expenses were genuinely incurred, connected with the arbitration, reasonable and proportionate. The tribunal may reduce excessive expenditure and may take inefficient procedural conduct into account.

The number of arbitrators, arbitration language and scope of document production are among the most important cost drivers. These issues should be considered when the contract is drafted rather than after the dispute begins.

Parties should also prepare for advance payments. An arbitration may be suspended or terminated if the required advance is not paid. A party may therefore need sufficient liquidity to pay both its own share and the opponent’s unpaid share to keep the case alive.

A realistic arbitration strategy combines legal analysis with financial planning.

Before commencing proceedings, the party should prepare a detailed budget, assess enforcement prospects, consider settlement and compare the expected recovery with the complete cost of obtaining and enforcing the award.

Well-managed arbitration is not necessarily inexpensive. It is a process in which the parties can control procedure, choose specialist decision-makers and allocate resources according to the commercial importance of the dispute.

Careful drafting, focused claims, proportionate evidence and disciplined case management can substantially reduce costs while preserving the quality and enforceability of the final award.

Legal Disclaimer: This article is provided for general informational purposes only and does not constitute legal advice. Arbitration costs depend on the arbitration agreement, applicable law, institutional rules, amount in dispute, number of arbitrators, procedural complexity, evidence, hearing format and enforcement requirements. Current fee schedules should be verified before commencing proceedings.