Technology and Software Arbitration in Turkey: IT Projects, Licensing and Data Disputes

Introduction

Digital transformation projects have become essential to businesses operating in Türkiye. Companies increasingly depend on enterprise software, cloud platforms, mobile applications, artificial intelligence systems, payment infrastructure, cybersecurity services, data analytics and outsourced information technology operations.

These projects often involve significant investment and operational risk. A delayed enterprise resource planning implementation may interrupt manufacturing and accounting processes. A defective payment platform may prevent customer transactions. A cybersecurity failure may expose personal and confidential data. A licensing dispute may restrict access to software that has become essential to the customer’s daily operations.

Technology disputes are rarely limited to a simple disagreement over an unpaid invoice. The parties may dispute whether the software satisfies the agreed specifications, whether acceptance occurred, whether the customer caused the delay, who owns the source code, whether open-source components were used lawfully, whether service levels were achieved or whether personal data were processed in accordance with Turkish law.

For complex domestic and cross-border projects, arbitration may provide an effective alternative to ordinary litigation. Technology and software arbitration in Turkey allows parties to select arbitrators with experience in software development, intellectual property, data protection and commercial contracts. The procedure may also be structured around technical expert evidence, secure document production and confidential hearings.

However, successful arbitration depends on careful contract drafting and early preservation of technical evidence. Software projects commonly involve several interdependent agreements, subcontractors, cloud providers, developers and data processors. The arbitration clause must therefore be coordinated across the entire contractual structure.

This comprehensive guide examines:

• Software development disputes;
• Licensing and intellectual property ownership;
• SaaS and cloud service agreements;
• Acceptance testing and defective software;
• Project delays and change requests;
• Service-level agreements;
• Source code and escrow;
• Personal data and cross-border transfers;
• Cybersecurity incidents;
• Expert evidence;
• Interim measures;
• Annulment and enforcement of arbitral awards.

What Is Technology and Software Arbitration?

Technology and software arbitration is the resolution of disputes arising from information technology projects, digital products, software licences and data-related services by one or more arbitrators rather than national courts.

The tribunal’s authority normally arises from a written arbitration agreement contained in:

• A software development agreement;
• A software licence;
• A SaaS subscription agreement;
• A cloud hosting agreement;
• An outsourcing contract;
• An implementation agreement;
• A maintenance and support agreement;
• A system integration agreement;
• A cybersecurity services agreement;
• A data processing agreement;
• An artificial intelligence development agreement;
• A source code escrow agreement.

The tribunal may determine whether:

• The software was delivered on time;
• The product complied with functional specifications;
• Acceptance testing was completed;
• Defects were material;
• Service levels were breached;
• Licence fees remain payable;
• Use exceeded the authorised licence scope;
• Source code must be delivered;
• Intellectual property rights were transferred validly;
• Data security obligations were breached;
• Contractual termination was justified;
• Compensation is payable.

Arbitration is especially suitable where a dispute requires both legal and technical analysis. The parties may appoint arbitrators familiar with technology transactions and may submit evidence from software engineers, cybersecurity professionals, database specialists, forensic accountants and intellectual property experts.

Turkish Legal Framework for Technology Arbitration

Technology disputes connected with Türkiye may involve several different statutes and contractual regimes.

The principal legal sources include:

• Turkish Code of Obligations No. 6098;
• Law No. 5846 on Intellectual and Artistic Works;
• Personal Data Protection Law No. 6698;
• Cybersecurity Law No. 7545;
• Turkish Commercial Code No. 6102;
• Electronic Commerce Law No. 6563;
• Turkish International Arbitration Law No. 4686;
• Articles 407 to 444 of the Turkish Code of Civil Procedure;
• Institutional arbitration rules;
• The parties’ software, licence and data-processing agreements.

No single statutory contract type applies automatically to every technology project. A software agreement may contain elements of:

• A contract for work;
• A service contract;
• A licence;
• A sale;
• A lease;
• Hosting;
• Maintenance;
• Intellectual property transfer;
• Personal data processing.

The legal classification depends on the principal obligations and the commercial purpose of the contract.

Software Development Agreements as Contracts for Work

A custom software development agreement may, depending on its structure, qualify wholly or partly as a contract for work under the Turkish Code of Obligations.

Article 470 defines a contract for work as an agreement under which the contractor undertakes to create a work and the customer undertakes to pay a price. Article 471 requires the contractor to perform with loyalty and care and in accordance with the professional and technical standards expected from a prudent contractor operating in the same field.

This classification may be relevant where the developer promises to produce a specific result, such as:

• A customised mobile application;
• An enterprise management system;
• An e-commerce platform;
• An application programming interface;
• A banking application;
• A customer relationship management system;
• An artificial intelligence model configured for a defined task.

By contrast, an agreement requiring only the provision of developers or ongoing technical assistance may be closer to a service arrangement. Many major technology projects are mixed contracts combining development, licensing, hosting, training and maintenance.

The contract should therefore identify which obligations are result-based and which are continuing service obligations.

Defective Software and the Customer’s Remedies

Under the contract-for-work provisions, the customer must inspect the delivered work when reasonably possible and notify defects within an appropriate period. Either party may request that the work be examined by an expert and that the findings be recorded in a report.

Where the contractor is responsible for a defect, Article 475 recognises remedies including:

• Withdrawal where the defect makes the work unusable or acceptance cannot reasonably be expected;
• Retaining the work and requesting a proportionate price reduction;
• Requesting free repair where repair would not involve excessive cost;
• Claiming damages under the general provisions.

Applying these remedies to software requires technical analysis.

A software defect may involve:

• Failure of a core function;
• Incorrect calculations;
• Security vulnerabilities;
• Data loss;
• Incompatibility with existing systems;
• Performance below the agreed capacity;
• Failure to comply with legal requirements;
• Unstable integrations;
• Repeated system crashes.

Not every programming error justifies termination. Complex systems almost always require debugging and maintenance. The tribunal should determine whether the issue is a minor defect, a correctable defect or a fundamental failure that defeats the commercial purpose of the project.

The contract should define:

• Severity levels;
• Response times;
• Correction periods;
• Acceptance criteria;
• The legal consequences of unresolved defects;
• Whether service credits are the exclusive remedy;
• When termination becomes available.

Acceptance Testing Disputes

Acceptance testing is one of the most important stages of a software project.

The parties may agree on:

• User acceptance testing;
• Factory acceptance testing;
• Security testing;
• Performance testing;
• Integration testing;
• Load testing;
• Regulatory compliance testing.

Disputes frequently arise because the agreement does not define objective acceptance criteria.

The customer may claim that the software was never accepted because serious defects remained. The developer may argue that:

• The system complied with the specification;
• The customer used the software in production;
• Objections were not made within the agreed period;
• Acceptance occurred automatically;
• The alleged defects arose from customer systems or third-party products.

Under Article 477 of the Turkish Code of Obligations, explicit or implicit acceptance may release the contractor from liability for defects other than defects deliberately concealed or not discoverable through a proper inspection. Latent defects must be reported without delay after discovery.

A technology contract should avoid relying only on general acceptance principles. It should specify:

1. The test environment;
2. Test cases;
3. Expected results;
4. The persons authorised to approve acceptance;
5. The period for reporting failures;
6. The process for correcting defects;
7. Whether partial acceptance is possible;
8. Whether production use constitutes acceptance;
9. The relationship between acceptance and payment.

Project Delay and Milestone Disputes

Software projects are frequently divided into stages such as:

• Analysis;
• Design;
• Development;
• Configuration;
• Data migration;
• Testing;
• Training;
• Go-live;
• Warranty support.

Disputes may arise where a milestone is missed or the final system is delivered late.

The customer may allege that the developer:

• Assigned insufficient personnel;
• Failed to understand requirements;
• Repeatedly delivered defective modules;
• Failed to manage subcontractors;
• Did not provide timely warnings;
• Used unsuitable technology.

The developer may argue that the delay was caused by:

• Incomplete customer requirements;
• Late access to data;
• Changes in project scope;
• Customer approval delays;
• Third-party integrations;
• Inadequate infrastructure;
• Regulatory changes;
• Failure to provide key personnel.

Article 473 of the Turkish Code of Obligations permits the customer, in defined circumstances, to withdraw before the agreed delivery date where the contractor failed to begin on time, delayed the work contrary to the contract or clearly cannot complete it on schedule for reasons not attributable to the customer. It also permits a warning and third-party completion where it becomes apparent during performance that the work will be defective or non-compliant because of the contractor’s fault.

A delay claim should include a project chronology showing:

• Baseline programme;
• Planned and actual milestone dates;
• Dependencies;
• Customer decisions;
• Change requests;
• Defect correction periods;
• Critical-path effect;
• Concurrent delays.

Change Requests and Scope Creep

Many technology disputes arise because the project scope changes without corresponding changes to price and timetable.

A customer may describe a requested function as part of the original specification. The developer may treat it as additional work.

The agreement should establish a formal change-control procedure requiring:

• Written description of the proposed change;
• Technical impact analysis;
• Price adjustment;
• Timetable adjustment;
• Effect on testing;
• Approval by authorised representatives;
• Updated documentation.

Informal messages, workshop notes and ticketing-system entries may become decisive evidence.

Where the parties repeatedly performed additional work without formal change orders, the tribunal may need to examine:

• The parties’ conduct;
• Authority of project managers;
• Course of dealing;
• Whether the change was necessary to satisfy the original requirements;
• Whether additional payment was expected;
• Whether rights were waived.

Software Licensing Disputes

A software licence grants the customer permission to use protected software within specified limits.

Licensing disputes may concern:

• Number of authorised users;
• Number of devices or processors;
• Geographic territory;
• Duration;
• Group-company use;
• Third-party access;
• Cloud deployment;
• Virtualisation;
• Modification;
• Reverse engineering;
• Transfer to another entity;
• Licence audits;
• Unpaid licence fees.

The distinction between ownership and a licence is fundamental.

Purchasing a software copy, receiving source code or paying development costs does not necessarily transfer all intellectual property rights. The agreement must state precisely which rights are assigned and which rights remain with the developer.

Copyright Protection of Computer Programs

Law No. 5846 defines a computer program as a sequence of computer instructions organised to enable a computer system to perform a specific task, together with the preparatory work leading to its creation. Computer programs and qualifying preparatory designs are protected as literary and scientific works, while the underlying ideas and principles are not protected as works merely because they form the basis of a program.

This distinction means that copyright may protect the original expression of software, including source and object code, but does not ordinarily give one party a monopoly over an abstract business idea, algorithmic concept or general functionality.

A software arbitration may therefore require comparison of:

• Source code;
• Architecture;
• Database structure;
• User interface elements;
• Documentation;
• Development history;
• Commit records;
• Similarities caused by technical necessity;
• Open-source components;
• Independently created elements.

Technical similarity alone does not always prove copying. The tribunal may need to determine whether the similarity concerns protected expression or an unprotected idea, method or function.

Ownership of Employee-Created Software

Under Article 18 of Law No. 5846, the authority to exercise economic rights belongs in principle to the author. Unless a private agreement or the nature of the work indicates otherwise, the economic rights over works created by employees, officers or workers while performing their duties are exercised by the employer.

The distinction between authorship and the authority to exercise economic rights is legally important.

Technology companies should obtain written agreements addressing software created by:

• Employees;
• Founders;
• Independent contractors;
• Freelancers;
• Consultants;
• Subcontractors;
• University researchers;
• Former employees.

A company may face serious ownership problems where critical source code was written by an external developer whose contract did not contain an effective intellectual property provision.

Due diligence should verify the complete chain of title before software is licensed, sold or contributed to an investment transaction.

Written Form for Transfer of Economic Rights

Article 52 of Law No. 5846 requires agreements and transactions concerning economic rights to be in writing and to identify the relevant rights separately.

A general clause stating that “all intellectual property belongs to the customer” may create interpretive and validity risks where it does not identify the rights and scope clearly.

A carefully drafted software agreement should address separately:

• Reproduction;
• Distribution;
• Adaptation and modification;
• Communication to the public;
• Commercialisation;
• Sublicensing;
• Duration;
• Territory;
• Exclusivity;
• Transferability;
• Future versions;
• Documentation;
• Database rights.

The agreement should also distinguish between:

• Pre-existing developer technology;
• Newly developed project code;
• Customer materials;
• Third-party software;
• Open-source components;
• General know-how;
• Project-specific customisations.

Software Use Rights and Interoperability

Law No. 5846 recognises certain statutory rights of a lawful user of a computer program. In the absence of decisive contractual provisions, reproduction and adaptation may be permitted where necessary for the program’s intended use, including correction of errors. The lawful user’s rights to load, run and correct errors cannot be contractually prevented, and a backup copy may be made where necessary for use. The law also permits limited acts necessary to obtain interoperability information under specified conditions.

These provisions may become relevant where:

• The software provider stops supporting the product;
• The customer needs to correct critical defects;
• Integration with another system is required;
• Access to documentation is restricted;
• The provider alleges unauthorised modification.

The scope of statutory rights must be analysed narrowly. Interoperability exceptions do not permit the customer to copy code for the purpose of developing and marketing a substantially similar competing product.

Open-Source Software Disputes

Modern software frequently contains open-source components.

Open-source software is not software without legal conditions. Different licences may impose different requirements concerning:

• Attribution;
• Copyright notices;
• Source code disclosure;
• Distribution of modifications;
• Licence compatibility;
• Patent permissions;
• Disclaimer of warranties.

Disputes may arise where a developer:

• Fails to identify open-source components;
• Uses code under an incompatible licence;
• Incorporates a copyleft component into proprietary software;
• Removes required notices;
• Exposes the customer to third-party claims.

The development agreement should require:

• An open-source inventory;
• Prior approval for specified licence categories;
• Software-composition analysis;
• Compliance documentation;
• Replacement obligations;
• Indemnification for unauthorised use.

SaaS and Cloud Service Disputes

Software-as-a-service and cloud contracts differ from traditional software delivery because the customer receives continuing access to a hosted platform rather than permanent possession of a program copy.

Common disputes include:

• Service interruption;
• Data loss;
• Failure to meet uptime guarantees;
• Unauthorised access;
• Sudden suspension;
• Price increases;
• Vendor lock-in;
• Data export difficulties;
• Insufficient backup;
• Termination assistance;
• Deletion of customer data.

The agreement should define:

• Service availability;
• Planned maintenance;
• Excluded downtime;
• Incident severity;
• Response and resolution times;
• Backup frequency;
• Recovery point objective;
• Recovery time objective;
• Data location;
• Data portability;
• Exit assistance;
• Service credits;
• Termination rights.

Service credits should be addressed carefully. The contract should state whether they are:

• The customer’s exclusive remedy;
• A minimum remedy;
• Separate from damages;
• Subject to a liability cap.

Service-Level Agreement Disputes

An SLA converts technical performance into measurable contractual obligations.

Common metrics include:

• Uptime;
• Latency;
• Transaction-processing time;
• Incident response;
• Resolution time;
• Support availability;
• Backup success;
• Security patching.

A dispute may concern the measurement method rather than actual system performance.

The parties should define:

• Monitoring tools;
• Measurement periods;
• Time zone;
• Rounding rules;
• Maintenance exclusions;
• Customer-caused incidents;
• Internet or third-party failures;
• Reporting procedure;
• Challenge period.

The tribunal may need to compare monitoring records from the customer, provider and an independent third-party service.

Data Protection and the KVKK

Technology projects frequently involve the processing of personal data belonging to customers, employees, users, patients or business contacts.

Personal Data Protection Law No. 6698 applies to natural persons whose personal data are processed and to natural or legal persons processing such data wholly or partly through automated means or as part of a structured filing system. It defines the data controller as the person determining the purposes and means of processing and the data processor as the person processing data on behalf of the controller.

A software provider may act as:

• A data processor;
• An independent data controller;
• A joint or separate controller for certain processing activities;
• Different roles for different data sets.

The contract’s label is relevant but not necessarily conclusive. The actual purposes and means of processing must be examined.

The data-processing agreement should regulate:

• Processing instructions;
• Data categories;
• Data subjects;
• Security measures;
• Sub-processors;
• Confidentiality;
• Data subject requests;
• Breach notification;
• Audit rights;
• Data return and deletion;
• Cross-border transfers.

Data Security Obligations

Article 12 of Law No. 6698 requires the data controller to take necessary technical and organisational measures to prevent unlawful processing, unlawful access and loss of personal data. The controller must conduct or arrange audits, while controllers and processors must not disclose or use personal data contrary to the law.

In a data breach dispute, the tribunal may need to determine:

• Which party controlled security architecture;
• Whether minimum technical standards were defined;
• Whether vulnerabilities were known;
• Whether security updates were installed;
• Whether access credentials were protected;
• When the incident was detected;
• Whether notification was timely;
• Whether the customer contributed to the incident.

The existence of a cyberattack does not automatically establish breach by the service provider. Liability depends on the contract, applicable legal obligations, security standard, causation and allocation of operational responsibility.

Cross-Border Data Transfers

Cloud and software services frequently transfer or make personal data accessible outside Türkiye.

Article 9 of Law No. 6698 was amended in 2024, and the Personal Data Protection Authority published a by-law and standard contracts governing transfers abroad. The available standard contractual mechanisms include controller-to-controller, controller-to-processor, processor-to-processor and processor-to-controller transfers.

A technology contract involving foreign data centres should identify:

• Countries where data are stored;
• Remote access locations;
• Sub-processors;
• Backup locations;
• Applicable transfer mechanism;
• Notification and filing obligations;
• Restrictions on further transfers;
• Government-access requests.

A contractual statement that “all legal requirements will be followed” may be insufficient where the operational data flow has not been mapped.

Cybersecurity Law No. 7545

Cybersecurity Law No. 7545 was adopted in March 2025 and establishes a national framework concerning the identification and elimination of cyber threats, reduction of the effects of cyber incidents and protection of public and private actors operating in cyberspace. The Cybersecurity Presidency lists the Law among Türkiye’s principal cybersecurity legislation.

Technology contracts should therefore be drafted with the understanding that cybersecurity obligations may arise not only from the contract and KVKK but also from sector-specific and national cybersecurity legislation.

Relevant contractual issues may include:

• Incident reporting;
• Cooperation with competent authorities;
• Security testing;
• Vulnerability disclosure;
• Audit and certification;
• Log retention;
• Business continuity;
• Disaster recovery;
• Supply-chain security;
• Protection of critical systems.

Regulatory investigations and administrative sanctions remain within the competence of public authorities. An arbitral tribunal may determine contractual liability between the parties, but it cannot replace the statutory powers of the relevant cybersecurity or data protection authority.

Artificial Intelligence Project Disputes

Artificial intelligence systems create additional contractual risks.

Disputes may concern:

• Training-data rights;
• Personal data processing;
• Model accuracy;
• Bias;
• Hallucinated outputs;
• Explainability;
• Intellectual property ownership;
• Third-party model restrictions;
• Regulatory compliance;
• Human oversight.

An AI contract should avoid promising an undefined level of “accuracy.” The parties should define:

• Test data;
• Benchmark methodology;
• Acceptable error rate;
• Restricted uses;
• Required human review;
• Retraining obligations;
• Responsibility for user prompts;
• Changes to third-party models;
• Audit and monitoring rights.

The tribunal may require experts in machine learning, data science and sector-specific regulation.

Source Code Escrow

Source code escrow can protect a customer that depends on business-critical software but does not own the source code.

The developer deposits source code, documentation, build instructions and related materials with an independent escrow agent.

Release events may include:

• Developer insolvency;
• Permanent cessation of support;
• Material uncured breach;
• Failure to maintain the software;
• Discontinuation of the product.

The escrow agreement should define:

• Deposit frequency;
• Verification;
• Completeness standards;
• Release procedure;
• Objection process;
• Permitted use after release;
• Confidentiality;
• Intellectual property limitations.

The escrow agent should be bound by a dispute resolution provision compatible with the primary software agreement. Otherwise, the customer may need separate proceedings to obtain the source code.

Confidentiality and Trade Secrets

Technology arbitration may involve highly sensitive material, including:

• Source code;
• Encryption keys;
• System architecture;
• Security reports;
• Customer databases;
• Algorithms;
• Product roadmaps;
• Pricing;
• Vulnerability information.

The tribunal may adopt protective measures such as:

• Restricted-access document repositories;
• Attorneys’ eyes only designations;
• Expert-only source code review;
• Redaction;
• Confidential annexes;
• Secure online hearings;
• Prohibition on copying or downloading;
• Return or destruction of documents.

The arbitration agreement should contain an express confidentiality provision because the existence of arbitration does not necessarily create a complete and identical confidentiality duty for every participant.

Evidence in Software Arbitration

Technical evidence should be preserved as soon as a dispute becomes foreseeable.

Relevant materials may include:

• Source code repositories;
• Commit histories;
• Branch records;
• Issue trackers;
• Test reports;
• User stories;
• Specifications;
• Architecture diagrams;
• Support tickets;
• System logs;
• Cloud audit records;
• Emails and messaging records;
• Change requests;
• Meeting minutes;
• Cybersecurity reports;
• Database snapshots.

A screenshot may show that an error occurred but may not establish its technical cause. Original logs, metadata and repository histories are generally more reliable.

The parties should preserve:

• Native file formats;
• Timestamps;
• User identities;
• Access logs;
• Version history;
• Hash values;
• Chain of custody.

Uncontrolled alteration of production systems after a dispute may destroy evidence. Where urgent intervention is necessary, the parties should consider an independent forensic image or joint expert inspection.

Expert Evidence

Software disputes commonly require experts in:

• Software engineering;
• Cybersecurity;
• Data architecture;
• Cloud infrastructure;
• Digital forensics;
• Project management;
• Licensing;
• Damages calculation.

An expert may be asked to determine:

• Whether the software met the specifications;
• Whether a defect existed;
• Which party caused a delay;
• Whether source code was copied;
• Whether security measures were adequate;
• Whether data could be restored;
• The reasonable cost of replacement.

The tribunal remains responsible for legal interpretation. A software expert should explain technical findings rather than deciding whether the contract was legally terminated or whether a limitation clause is enforceable.

Interim Measures and Evidence Preservation

Technology disputes may require urgent protection before the main tribunal is constituted.

Possible measures include:

• Preservation of source code;
• Prevention of deletion of cloud data;
• Continued temporary access to a platform;
• Protection of confidential information;
• Suspension of unauthorised software use;
• Independent forensic examination;
• Preservation of logs and repositories.

Under Article 414 of the Turkish Code of Civil Procedure, a domestic arbitral tribunal may order interim measures or evidence preservation and may require security. Courts may declare qualifying arbitral measures enforceable and may grant judicial protection where the tribunal cannot act effectively or in time under the statutory conditions.

Court assistance may be preferable where:

• The measure concerns a non-signatory cloud provider;
• An ex parte order is required;
• A third-party server must be preserved;
• Coercive enforcement is necessary;
• Criminal or regulatory evidence is involved.

Arbitrability of Technology Disputes

Most contractual technology disputes may be arbitrated because they concern commercial rights subject to the parties’ control.

Examples include:

• Software development payments;
• Licence fees;
• Defect claims;
• Service-level breaches;
• Source code delivery;
• Contractual data security;
• Confidentiality;
• Intellectual property licences;
• Damages.

Article 408 of the Turkish Code of Civil Procedure excludes disputes concerning rights in rem over immovable property and matters not subject to the parties’ free disposition. Article 412 recognises written arbitration agreements covering all or part of contractual and non-contractual disputes.

Careful analysis is required where the requested remedy concerns:

• Criminal liability;
• Administrative fines;
• Decisions of the Personal Data Protection Board;
• Public cybersecurity measures;
• Rights affecting non-parties;
• Registration or validity with effect against everyone.

The tribunal may determine contractual responsibility for a data breach, but it cannot annul an administrative fine imposed by the competent authority.

Drafting the Arbitration Clause

ISTAC’s model clause refers disputes arising out of or connected with the contract to final arbitration under the ISTAC Arbitration Rules. ISTAC also recommends that parties specify the seat, language, number of arbitrators and law applicable to the merits.

An expanded technology arbitration clause may provide:

Any dispute, controversy or claim arising out of or in connection with this Agreement, including any dispute concerning its formation, validity, interpretation, performance, software specifications, acceptance testing, licensing, intellectual property rights, service levels, data processing, cybersecurity, breach, termination or consequences of termination, shall be finally resolved under the Istanbul Arbitration Centre Arbitration Rules.

The seat of arbitration shall be Istanbul, Türkiye. The tribunal shall consist of three arbitrators, at least one of whom shall have substantial experience in technology and software disputes. The language of arbitration shall be English. Turkish law shall govern the merits of the dispute.

The clause should be coordinated with:

• Data processing agreements;
• Escrow agreements;
• Maintenance agreements;
• Cloud hosting agreements;
• Subcontractor agreements;
• Third-party licences.

Damages in Technology Arbitration

Potential claims may include:

• Refund of development fees;
• Cost of completing the project;
• Cost of replacement software;
• Data restoration expenses;
• Business interruption;
• Lost profits;
• Third-party claims;
• Incident-response costs;
• Contractual penalties;
• Service credits;
• Licence fees;
• Unpaid maintenance fees.

The claimant must establish:

• Breach;
• Causation;
• Recoverable loss;
• Reasonable mitigation;
• Compliance with contractual limitations.

Lost-profit claims require particular care. The claimant should distinguish loss caused by the contractual breach from loss caused by market conditions, internal business decisions or unrelated operational problems.

The agreement should regulate:

• Liability caps;
• Excluded losses;
• Data-loss liability;
• Cybersecurity liability;
• Intellectual property indemnity;
• Gross negligence and intentional conduct;
• Third-party claims;
• Insurance requirements.

Annulment and Enforcement

A Turkey-seated arbitral award is not subject to an ordinary appeal on the merits.

Under Article 439 of the Turkish Code of Civil Procedure, a domestic award may be challenged only on limited grounds, including invalidity of the arbitration agreement, improper tribunal constitution, jurisdictional excess, serious procedural irregularity, violation of equality or the right to be heard, non-arbitrability and public policy.

The annulment court should not ordinarily re-examine source code, repeat acceptance testing or substitute its technical view for that of the tribunal merely because one party disagrees with the award.

Foreign and non-domestic awards may benefit from the New York Convention, which establishes common standards for recognising arbitration agreements and enforcing arbitral awards across contracting jurisdictions, subject to limited refusal grounds.

Practical Technology Arbitration Checklist

Before signing a technology contract, the parties should determine:

1. Whether the project scope is measurable;
2. Whether requirements and acceptance criteria are complete;
3. Which obligations are result-based;
4. Who owns existing and newly developed code;
5. Whether intellectual property rights are listed separately in writing;
6. Which open-source licences may be used;
7. Whether source code escrow is required;
8. How changes will be approved;
9. How delays will be attributed;
10. Which service levels apply;
11. Where personal data will be stored;
12. Whether cross-border transfers are required;
13. Which cybersecurity obligations apply;
14. How technical evidence will be preserved;
15. Which related parties must sign the arbitration clause;
16. Whether interim access or evidence protection may be required;
17. The seat, language and number of arbitrators;
18. Whether a technology-qualified arbitrator is required;
19. Which liability caps and exclusions apply;
20. Where the final award may need to be enforced.

Frequently Asked Questions

Can software development disputes be arbitrated in Türkiye?

Yes. Contractual disputes concerning software delivery, defects, acceptance, payment and termination are generally capable of arbitration where a valid written arbitration agreement exists.

Is software protected by copyright under Turkish law?

Yes. Computer programs and qualifying preparatory designs are protected as literary and scientific works under Law No. 5846, while underlying ideas and principles are not protected merely as program elements.

Does paying for custom development transfer all intellectual property rights?

Not automatically. The contract must distinguish ownership, licences and transferred economic rights. Agreements concerning economic rights must be written and identify the rights separately.

Who owns software written by an employee?

The author remains important under copyright law, while Article 18 regulates the employer’s authority to exercise economic rights over works created by employees while performing their duties unless the agreement or nature of the work indicates otherwise.

Can the customer repair software errors?

Law No. 5846 recognises specified rights of lawful users, including certain acts necessary for intended use and error correction. The precise scope depends on the contract and statutory conditions.

Can a data breach dispute be arbitrated?

Contractual liability between the customer and service provider may generally be arbitrated. Administrative investigations, fines and public-law decisions remain within the authority of the relevant public bodies.

Can the tribunal order preservation of source code?

A tribunal may order interim measures or evidence preservation within the applicable arbitration framework. Judicial assistance may be required where coercive enforcement or action against a third party is necessary.

Is ISTAC suitable for technology disputes?

Yes. Parties may refer technology disputes to ISTAC by including a valid clause and may specify the seat, language, number of arbitrators and governing law.

Can the arbitration be conducted in English?

Yes. The parties may select English or another agreed language.

Can a foreign software arbitration award be enforced in Türkiye?

A qualifying foreign award may be recognised and enforced under the New York Convention or applicable Turkish private international law, subject to limited refusal grounds.

Conclusion

Technology and software arbitration in Turkey provides an effective mechanism for resolving disputes concerning software development, licensing, SaaS platforms, cloud services, data processing, cybersecurity and artificial intelligence systems.

Technology disputes require a combination of legal, commercial and technical expertise. A tribunal may need to interpret development milestones, analyse source code, evaluate security architecture, determine intellectual property ownership and calculate business interruption losses.

Turkish law protects computer programs as literary and scientific works. However, underlying ideas and principles are not protected in the same manner as the original expression of the program. Intellectual property clauses should therefore distinguish carefully between source code, pre-existing technology, new development, documentation, licences and know-how.

Agreements concerning economic rights must be in writing and identify the transferred rights separately. Businesses should not assume that payment for development automatically transfers every copyright entitlement.

Custom software projects may fall wholly or partly within the contract-for-work provisions of the Turkish Code of Obligations. Acceptance testing, defect notification, repair, price reduction, termination and damages should nevertheless be regulated expressly because general statutory provisions may not address the technical complexity of a major software project.

Data disputes require additional planning. Contracts should determine the roles of controllers and processors, security measures, sub-processors, breach notification, deletion, audit rights and transfer of personal data abroad.

Cybersecurity obligations should also be coordinated with Law No. 7545, sector-specific regulation and the parties’ contractual security standards.

The arbitration clause should cover:

• Development;
• Licensing;
• Intellectual property;
• Data processing;
• Cybersecurity;
• Service levels;
• Acceptance;
• Termination;
• Damages.

All connected contracts should contain compatible dispute resolution provisions.

Once a dispute becomes foreseeable, the parties should preserve source code repositories, logs, ticketing records, test results, cloud records and project communications. Technical evidence can be altered or deleted rapidly, making early preservation essential.

For software companies, technology investors, SaaS providers, cloud customers and businesses implementing digital transformation projects in Türkiye, specialised arbitration counsel can assist with contract drafting, intellectual property protection, data disputes, interim measures, expert evidence and enforcement of technology arbitral awards.