Sovereign Immunity and Enforcement against State Assets in Turkey

Sovereign immunity and enforcement against state assets in Turkey are critical issues for investors, contractors, banks, suppliers and arbitral award creditors dealing with foreign states, ministries, public authorities and state-owned entities.

A private company may successfully obtain an arbitral award requiring a foreign state to pay compensation. That award does not necessarily mean that every asset associated with the state can immediately be attached in Turkey.

The claimant must distinguish between three separate legal stages:

1. Establishing jurisdiction over the foreign state;
2. Obtaining recognition or enforcement of the award in Turkey;
3. Executing the recognised award against an identifiable and legally attachable asset.

Each stage raises different immunity questions.

A foreign state may be unable to rely on jurisdictional immunity because the dispute arose from a commercial contract. It may nevertheless retain immunity from execution over diplomatic bank accounts, military assets, central-bank reserves or property used for sovereign public purposes.

Similarly, a state’s agreement to arbitrate may constitute consent to arbitration and to certain court proceedings supporting arbitration. It does not automatically constitute consent to the seizure of every category of state property.

This distinction is the central principle of sovereign enforcement law.

Turkish law adopts a restrictive approach to jurisdictional immunity in private-law disputes. Article 49 of Law No. 5718 on Private International Law and International Civil Procedure provides that a foreign state is not granted jurisdictional immunity in legal disputes arising from private-law relationships. It also permits service in such disputes through the foreign state’s diplomatic representatives.

However, Article 49 does not itself establish a complete statutory code governing immunity from attachment and execution. Enforcement therefore requires a separate analysis of the nature, ownership, use and legal protection of the targeted property.

This article explains the distinction between jurisdictional and execution immunity, commercial activity exceptions, arbitration agreements, foreign award enforcement, ICSID awards, diplomatic property, central-bank assets, state-owned enterprises, waiver clauses and practical enforcement strategy in Turkey.

What Is Sovereign Immunity?

Sovereign immunity is the principle that one state and its property may enjoy protection from the jurisdiction and coercive measures of another state.

Historically, immunity was often described as absolute. Under that approach, a foreign state could claim immunity regardless of whether it acted as a sovereign authority or commercial participant.

Modern practice generally distinguishes between:

• Sovereign or governmental acts, often described as acta jure imperii; and
• Private or commercial acts, often described as acta jure gestionis.

A state purchasing military equipment for sovereign defence functions may present different immunity questions from a state-owned trading body purchasing ordinary commodities for resale.

The Turkish statutory approach reflects this restrictive model at the jurisdictional stage. Article 49 removes jurisdictional immunity in disputes arising from private-law relationships.

The classification of an act should generally depend on the legal nature of the transaction rather than merely the political or developmental purpose that motivated it.

A state does not necessarily transform an ordinary construction, loan, supply or consultancy contract into a sovereign act merely by stating that the project served a public purpose.

Jurisdictional Immunity and Execution Immunity Are Different

The most important distinction is between immunity from jurisdiction and immunity from execution.

Jurisdictional Immunity

Jurisdictional immunity determines whether a court or tribunal may hear and decide a claim against a foreign state.

For example, it may concern whether:

• The foreign state can be named as respondent;
• The tribunal has authority under the arbitration agreement;
• A Turkish court may hear an annulment or enforcement application;
• The state may object to judicial proceedings on immunity grounds.

Immunity from Execution

Execution immunity concerns whether coercive measures may be taken against state property after liability has been established.

Such measures include:

• Interim attachment;
• Freezing a bank account;
• Garnishing a receivable;
• Seizing movable property;
• Selling property through enforcement;
• Arresting a commercial vessel;
• Attaching shares or commercial income.

Consent to adjudication does not necessarily mean consent to execution.

The United Nations Convention on Jurisdictional Immunities of States and Their Property reflects this distinction by stating that consent to jurisdiction does not, by itself, imply consent to measures of constraint. Its provisions provide a useful comparative framework for separating jurisdiction from enforcement, although the direct applicability of the Convention must be assessed according to the treaty status of the states concerned and applicable law.

Foreign States and Private-Law Disputes under Turkish Law

Article 49 of Law No. 5718 states that a foreign state does not enjoy jurisdictional immunity in civil disputes arising from private-law relationships.

This may cover disputes arising from:

• Construction contracts;
• Supply agreements;
• Commercial leases;
• Consultancy contracts;
• Loan agreements;
• Guarantees;
• Concession-related commercial commitments;
• Energy-purchase contracts;
• Shareholder agreements;
• Technology agreements;
• Settlement agreements.

The label attached to the contract is not conclusive.

A contract signed by a ministry may still be a private-law commercial contract. Conversely, an agreement concerning the direct exercise of regulatory, military, taxation or diplomatic powers may retain a sovereign character.

Relevant considerations may include:

• Whether a private party could enter the same type of transaction;
• Whether the state acted through contractual rather than regulatory authority;
• Whether the obligation is payment, delivery or commercial performance;
• Whether the transaction involves sovereign coercion;
• Whether the dispute challenges an administrative or legislative act;
• Whether the contract expressly characterises the relationship.

Commercial Purpose Is Not the Same as Commercial Nature

A state may argue that a contract served a sovereign objective, such as:

• Building a hospital;
• Developing national infrastructure;
• Purchasing public transportation;
• Supplying an army;
• Establishing an energy network;
• Supporting economic development.

The public purpose of a project does not necessarily determine the legal nature of the underlying contract.

The 2004 UN State Immunities Convention defines commercial transactions to include contracts for goods or services, financial transactions, loans, guarantees and other commercial, industrial, trading or professional transactions. It indicates that the transaction’s nature is the primary consideration, while purpose may also be relevant in defined circumstances.

In practice, a contractor should analyse whether the state behaved as a market participant or exercised uniquely sovereign authority.

Effect of an Arbitration Agreement

When a state signs a written arbitration agreement, it consents to have the covered dispute resolved by arbitration.

That consent generally prevents the state from relying on jurisdictional immunity to defeat:

• Constitution of the tribunal;
• The arbitral proceedings;
• Court assistance connected with arbitration;
• Certain recognition or annulment proceedings.

The UN State Immunities Convention reflects the principle that a state agreeing in writing to arbitrate a commercial dispute cannot invoke jurisdictional immunity before a competent court in proceedings concerning the arbitration agreement, arbitration procedure, confirmation or setting aside of the award.

However, an arbitration clause should not be treated as an unlimited waiver of execution immunity.

A state may consent to arbitration while preserving protection for:

• Embassy property;
• Diplomatic bank accounts;
• Military property;
• Central-bank assets;
• Cultural objects;
• Assets used for governmental functions.

A creditor should therefore seek an express and carefully drafted waiver of immunity from attachment and execution, rather than relying solely on the arbitration clause.

Recognition Is Not the Same as Attachment

A Turkish court’s recognition or enforcement of an arbitral award establishes that the award may be treated as enforceable in Turkey.

It does not answer whether a particular state asset can lawfully be seized.

The enforcement process should therefore be divided into two questions:

Question One: Is the Award Enforceable?

This is determined under the applicable arbitration treaty and Turkish private international law.

Question Two: Is the Identified Asset Subject to Execution?

This requires a separate asset-specific immunity analysis.

An award creditor may succeed completely on the first question and fail on the second because the targeted property is protected by execution immunity.

Enforcement of Foreign Arbitral Awards in Turkey

Foreign arbitral awards may be enforced in Turkey under the New York Convention or Articles 60 to 63 of Law No. 5718, depending on the applicable legal framework.

The New York Convention establishes common standards for recognising arbitration agreements and enforcing foreign and non-domestic arbitral awards.

Under Article 60 of Law No. 5718, a foreign arbitral award may be enforced where it has become final, enforceable or binding on the parties.

The application is submitted to the agreed competent court. In the absence of such agreement, jurisdiction may lie with the court at the debtor’s residence, habitual location or the place where assets capable of execution are located.

The applicant must submit:

• The arbitration agreement;
• The arbitral award;
• Proof of binding or enforceable status where required;
• Properly certified translations.

Grounds for Refusing Enforcement

Article 62 of Law No. 5718 permits refusal on limited grounds, including:

• Absence or invalidity of the arbitration agreement;
• Conflict with public policy;
• Non-arbitrability;
• Lack of representation;
• Inadequate notice;
• Denial of the opportunity to present the case;
• Irregular tribunal constitution or procedure;
• Excess of jurisdiction;
• The award not being binding or having been set aside.

These grounds concern enforceability of the award.

They should not be confused with the separate question of whether an embassy account, central-bank deposit or another state asset may be attached after enforcement is granted.

Does the New York Convention Remove Sovereign Immunity?

No automatic conclusion should be drawn that the New York Convention eliminates execution immunity.

The Convention requires contracting states to recognise qualifying awards and make them generally enforceable according to local procedural rules. It does not contain a complete code identifying which sovereign assets may be seized.

UNCITRAL materials note that the New York Convention is generally understood not to determine state immunity from execution.

Accordingly, an award against a state may fall within the Convention, while execution against the state’s property remains subject to the immunity law and enforcement rules of the country where the asset is located.

ICSID Awards against States

ICSID awards follow a special treaty-based enforcement regime.

The ICSID Convention entered into force for Türkiye on 2 April 1989.

Article 54 of the ICSID Convention requires contracting states to recognise an ICSID award as binding and enforce the pecuniary obligations as if the award were a final judgment of a domestic court.

A party seeking recognition must provide a copy of the award certified by the ICSID Secretary-General to the competent court or authority.

Unlike ordinary foreign awards, an ICSID award is not subject to the New York Convention’s substantive refusal grounds. Challenges to an ICSID award must generally be pursued through the Convention’s own post-award mechanisms.

This does not eliminate execution immunity.

Article 55 expressly preserves the domestic law of each contracting state concerning the immunity of that state or a foreign state from execution.

The practical position is therefore:

• Article 54 facilitates recognition of the ICSID award;
• Article 55 preserves immunity from execution;
• The creditor must still identify non-immune assets.

Pre-Judgment Attachment of State Property

Obtaining interim attachment against a foreign state before the final award is more difficult than executing an ordinary commercial debt.

Pre-judgment measures interfere with property before final liability has been established. State immunity principles therefore generally provide stronger protection at this stage.

The UN State Immunities Convention’s comparative framework permits pre-judgment measures only where:

• The state expressly consented to the measure; or
• The state allocated or earmarked property to satisfy the relevant claim.

An arbitration agreement by itself may be insufficient unless it expressly includes consent to interim attachment or other measures of constraint.

Even an express contractual waiver may be interpreted narrowly, particularly where diplomatic or military property is targeted.

Post-Award Execution against Commercial State Property

State property used for commercial purposes presents the strongest potential basis for execution.

Possible examples may include:

• Revenue from a commercial sale;
• Receivables arising from trading activities;
• Commercial rental income;
• Non-diplomatic bank accounts used for business transactions;
• Shares owned for commercial investment purposes;
• Commercial cargo;
• Income from a state-operated business;
• Assets allocated to a trading or investment activity.

The creditor must prove more than formal state ownership.

The principal evidentiary question is how the asset is actually used or intended to be used.

The comparative rule in Article 19 of the UN State Immunities Convention permits post-judgment measures where the property is specifically used or intended for use for purposes other than governmental non-commercial purposes, subject to the required connection with the entity against which proceedings were directed.

This framework illustrates why asset tracing must focus on purpose and use rather than the asset’s value alone.

Diplomatic and Consular Property

Diplomatic and consular property is among the most strongly protected categories.

The Vienna Convention on Diplomatic Relations protects the inviolability of diplomatic mission premises. Türkiye acceded to that Convention on 6 March 1985.

The UN State Immunities Convention also identifies property and bank accounts used or intended for the functions of diplomatic missions, consular posts, special missions and delegations as protected governmental property.

Protected assets may include:

• Embassy buildings;
• Consular premises;
• Official mission residences;
• Mission vehicles;
• Diplomatic bank accounts;
• Official archives;
• Property used for diplomatic functions.

The fact that a judgment or award arose from a commercial contract does not automatically make diplomatic property attachable.

Similarly, Article 49 of Law No. 5718 allows service on diplomatic representatives in private-law disputes. That service rule does not convert the embassy or its accounts into executable commercial property.

Diplomatic Bank Accounts

A bank account in the name of an embassy requires careful analysis.

The creditor may argue that:

• The account receives commercial revenue;
• It is used for property rentals;
• It supports a state-owned trading activity;
• Funds were transferred to avoid execution.

The foreign state may argue that the account funds:

• Salaries;
• Rent and utilities;
• Consular operations;
• Diplomatic travel;
• Security;
• Official representation.

Mixed-use accounts create particular difficulty.

A creditor should not assume that the existence of some commercial transactions removes protection from the entire account. The bank records, account mandate, payment history and actual functional purpose may become decisive.

Central-Bank and Monetary Authority Assets

Central-bank assets receive particularly strong protection under international immunity principles.

The comparative categories listed in Article 21 of the UN State Immunities Convention include property of a state’s central bank or other monetary authority among assets not treated as commercial property for ordinary execution purposes.

Such property may include:

• Monetary reserves;
• Foreign-exchange deposits;
• Assets used for currency management;
• Reserve-management securities;
• Monetary-policy accounts.

A central bank’s separate legal personality may also raise additional questions concerning:

• Ownership of the asset;
• Whether the bank is the award debtor;
• Whether state and central-bank liabilities are legally distinct;
• Whether the asset is used for monetary functions.

An award against a ministry or sovereign state should not automatically be enforced against a legally separate central bank.

Military Property

Military property and assets used for defence functions are generally treated as protected sovereign assets.

The comparative UN framework expressly identifies property of a military character or used for military functions as protected.

Examples may include:

• Warships;
• Military aircraft;
• Weapons;
• Defence equipment;
• Military bank accounts;
• Property used for defence procurement;
• Military facilities.

A state-owned vessel used for ordinary commercial carriage may require a different analysis from a warship or vessel used exclusively for governmental non-commercial service.

The UN Convention distinguishes state-owned commercial ships from warships, naval auxiliaries and other vessels used solely for governmental non-commercial purposes.

Cultural Property and State Archives

Cultural objects, state archives and items temporarily displayed for scientific or historical exhibitions may also receive special protection.

The UN State Immunities Convention identifies:

• State cultural heritage;
• Archives;
• Scientific, cultural or historical exhibition objects;

as categories normally protected where they have not been placed or intended to be placed on sale.

Creditors should therefore exercise extreme caution before targeting:

• Museum collections;
• Archaeological objects;
• Historic documents;
• State archives;
• Loaned exhibition pieces.

The presence of valuable cultural property in Turkey does not mean that it can be used to satisfy an unrelated commercial award.

State-Owned Enterprises

A state-owned enterprise should not automatically be treated as identical to the foreign state.

Relevant entities may include:

• National oil companies;
• State airlines;
• Public utilities;
• Sovereign investment companies;
• Port operators;
• Electricity companies;
• State banks;
• Commodity trading companies.

The legal analysis should address:

• Separate legal personality;
• Ownership;
• Statutory functions;
• Commercial autonomy;
• Governance;
• Ability to own property;
• Ability to sue and be sued;
• Whether the entity exercised sovereign powers;
• Whether the state or entity was named in the award.

The UN State Immunities Convention recognises that state agencies or instrumentalities fall within the definition of the state only to the extent that they are entitled to perform and are actually performing sovereign authority. It also distinguishes separately incorporated state enterprises involved in their own commercial transactions.

State ownership alone does not necessarily make the enterprise’s assets available for a sovereign debt.

Conversely, separate incorporation should not automatically protect assets where the entity is merely being used to conceal state ownership or frustrate an established obligation. Such arguments require strong evidence and careful application of Turkish company, enforcement and private international law.

Can Assets of a State-Owned Company Be Used for a State Award?

Ordinarily, enforcement should be directed against assets belonging to the award debtor.

Where the award is against the foreign state but an asset belongs legally to a separate state-owned company, the creditor may need to establish a legal basis for treating the entity and state as the same debtor.

Evidence may concern:

• Complete state control;
• Lack of operational independence;
• Commingling of assets;
• Use of the entity to avoid payment;
• State assumption of the entity’s obligations;
• Fraudulent transfer;
• Absence of genuine separate corporate activity.

A high level of ownership or control may not, by itself, be sufficient.

The creditor should also verify whether the arbitral award imposes liability directly on the entity, the state or both.

Waiver of Sovereign Immunity

A state may waive immunity, but the scope and wording of the waiver are critical.

Possible waivers include:

• Consent to arbitration;
• Waiver of jurisdictional immunity;
• Waiver of immunity in recognition proceedings;
• Waiver of pre-judgment attachment immunity;
• Waiver of post-award execution immunity;
• Consent concerning specified assets.

A general arbitration clause may waive the first two categories but leave execution immunity unresolved.

The UN State Immunities Convention confirms that consent to jurisdiction does not itself imply consent to measures of constraint.

A well-drafted contract should therefore address execution expressly.

Sample Sovereign-Immunity Waiver Clause

“The State irrevocably agrees that any dispute arising out of or relating to this Agreement may be submitted to arbitration in accordance with the arbitration clause contained herein.

To the fullest extent permitted by applicable law, the State irrevocably waives any immunity from jurisdiction that it or its assets may otherwise enjoy in relation to the arbitration, any application for interim relief, any proceeding concerning the constitution or authority of the arbitral tribunal, any proceeding for recognition or enforcement of the award and any related judicial proceeding.

The State further irrevocably and expressly waives, to the fullest extent permitted by applicable law, immunity from attachment before judgment, attachment in aid of execution, execution and other measures of constraint in respect of property used or intended for use for commercial purposes.

Nothing in this clause shall be interpreted as a waiver concerning diplomatic or consular premises, diplomatic or consular bank accounts used for official functions, military property, central-bank or monetary-authority assets, cultural heritage, state archives or another category of property whose immunity cannot validly be waived under mandatory law.

The State represents that the persons signing this Agreement have all authority required to grant the consents and waivers stated in this clause.”

This wording should be adapted to the governing law, identity of the state entity and jurisdictions where enforcement is anticipated.

Why “To the Fullest Extent Permitted by Law” Matters

A contractual waiver cannot necessarily override every mandatory rule of international or domestic law.

Certain assets may remain protected despite broad wording.

The phrase “to the fullest extent permitted by applicable law” recognises that:

• Some immunities cannot be waived casually;
• Some waivers must be express;
• Some property categories require specific reference;
• Public international law may limit enforcement;
• The enforcing court applies its own execution law.

A creditor should not rely on generic phrases such as “the state waives all immunity whatsoever” without analysing whether the clause will be recognised in each likely enforcement jurisdiction.

Service on a Foreign State

Service requires careful attention.

Article 49 permits service on the foreign state’s diplomatic representatives in private-law disputes.

The arbitration agreement may also provide for contractual notice through:

• A specified ministry;
• A government legal department;
• A designated process agent;
• Diplomatic channels;
• Registered electronic communication;
• Courier delivery.

The procedural method used should satisfy:

• The arbitration agreement;
• Institutional rules;
• Law of the arbitral seat;
• Turkish enforcement standards;
• Applicable international service rules.

Improper notice may later support an objection that the state was unable to present its case.

This risk is especially significant in default arbitrations where the state does not participate.

Default Awards against States

A state’s refusal to participate does not necessarily prevent arbitration from proceeding.

The tribunal must nevertheless establish:

• A valid arbitration agreement;
• Proper service;
• Jurisdiction;
• Sufficient evidence;
• Compliance with the right to be heard;
• A reasoned basis for relief.

The tribunal should not treat non-participation as automatic admission of every allegation.

The award should document:

• How notices were served;
• Which opportunities were provided;
• Which evidence was considered;
• Why jurisdiction exists;
• How damages were calculated.

Detailed procedural records reduce recognition and enforcement risk.

Interim Measures and Emergency Arbitration

A claimant may need urgent protection before the final award because the state or state entity is allegedly:

• Transferring commercial assets;
• Diverting project revenue;
• Terminating a concession;
• Calling a guarantee;
• Moving receivables;
• Dissipating funds.

An arbitral tribunal or emergency arbitrator may issue an order binding the parties within the scope of consent.

Actual attachment of an asset in Turkey requires Turkish judicial and enforcement authority.

The applicant must therefore consider:

• Whether the state expressly waived pre-award attachment immunity;
• Whether the identified asset is commercial;
• Whether the asset is owned by the debtor;
• Whether the Turkish court has territorial jurisdiction;
• Whether statutory interim-attachment conditions are satisfied;
• Whether the measure affects diplomatic or public property.

Asset Tracing before Enforcement

Enforcement strategy should begin before the arbitration is completed.

The creditor should identify:

• The exact legal identity of the state respondent;
• Ministries and agencies involved;
• State-owned companies;
• Commercial bank accounts;
• Receivables;
• Rental income;
• Shares;
• Commercial vessels or cargo;
• Project revenue;
• Contractual payment streams;
• Properties used commercially.

The investigation should distinguish between:

• State ownership and entity ownership;
• Commercial use and public use;
• Present use and intended use;
• Assets located in Turkey and assets located abroad;
• Property subject to third-party rights.

A creditor should avoid seeking indiscriminate attachment of all assets associated with the foreign state. A targeted application based on a clearly commercial asset is legally and strategically stronger.

Burden of Proving Commercial Use

In practice, the creditor seeking execution will usually need persuasive evidence that the asset is not being used for protected governmental purposes.

Useful evidence may include:

• Commercial contracts;
• Bank statements;
• Invoices;
• Rental agreements;
• Corporate records;
• Shipping documents;
• Public financial reports;
• Payment instructions;
• Asset-management records;
• Evidence of revenue-generating activity.

Public ownership is not enough.

A building owned by a state may be used as an embassy, cultural centre, rental investment or commercial office. Its legal treatment depends on use, not merely title.

Connection between Asset and Judgment Debtor

An asset may be commercial but still unavailable because it belongs to another person.

The creditor should establish:

• Legal ownership;
• Beneficial ownership where recognised;
• The debtor’s control;
• The entity against which the award was made;
• Any assignment or transfer;
• Whether the asset was earmarked to satisfy the claim.

The UN Convention’s comparative execution rule also links commercial property to the entity against which proceedings were directed.

This prevents an award against one public body from automatically becoming enforceable against every institution associated with the same foreign state.

Settlement and Voluntary Payment

Voluntary compliance is generally preferable to contested sovereign execution.

Post-award negotiations may address:

• Payment schedule;
• Currency;
• Interest;
• Escrow;
• Bank guarantee;
• Waiver of further challenge;
• Release of attachment applications;
• Confidentiality;
• Tax treatment.

A state may prefer negotiated payment to public attachment proceedings involving commercial assets.

The award creditor should preserve legal rights during negotiations and avoid allowing limitation or enforcement periods to expire.

Practical Checklist for State Contracts

Before signing a contract with a foreign state, the private party should confirm:

• Exact legal identity of the state counterparty;
• Authority of the signatory;
• Whether a ministry or separate entity is contracting;
• Governing law;
• Arbitration institution;
• Seat;
• Language;
• Number of arbitrators;
• Express jurisdictional-immunity waiver;
• Express execution-immunity waiver;
• Consent to interim attachment;
• Assets designated for payment;
• Payment security;
• Process agent;
• Notice method;
• State-owned guarantor;
• Budget or appropriation requirements;
• Enforcement jurisdictions.

Security should be addressed before performance begins.

An unconditional bank guarantee, escrow account, letter of credit or project-revenue assignment may be more effective than relying on general execution against sovereign assets years later.

Practical Checklist after Obtaining an Award

The creditor should determine:

• Whether the award is ICSID or non-ICSID;
• Whether the New York Convention applies;
• Which Turkish court is competent;
• Which documents require certification and translation;
• Whether the award is binding;
• Whether annulment or stay proceedings exist;
• Whether the state received proper notice;
• Which assets exist in Turkey;
• Who legally owns each asset;
• How each asset is used;
• Whether diplomatic, military or central-bank immunity applies;
• Whether an express execution waiver exists;
• Whether interim measures are possible;
• Whether settlement is commercially preferable.

Frequently Asked Questions

Can a foreign state claim immunity in a Turkish commercial dispute?

Article 49 of Law No. 5718 provides that a foreign state is not granted jurisdictional immunity in legal disputes arising from private-law relationships.

Does a state lose immunity merely by signing a commercial contract?

A private-law commercial contract may remove jurisdictional immunity for disputes arising from that relationship. Execution immunity over particular property still requires a separate analysis.

Does an arbitration clause waive sovereign immunity?

It generally supports consent to arbitration and related judicial proceedings. It does not automatically waive immunity from attachment or execution.

Can a state waive execution immunity?

A state may give express consent to execution measures within the limits of applicable law. The waiver should identify pre-judgment attachment, post-award execution and commercial assets expressly.

Can an award creditor attach an embassy?

Diplomatic premises are strongly protected by international law and are not ordinarily available for commercial-award execution.

Can an embassy bank account be frozen?

An account used or intended for diplomatic functions is generally protected. An account proven to be separate and used exclusively for commercial activity may require a different analysis, but mixed-use accounts remain difficult to attach.

Can central-bank assets be seized?

Central-bank and monetary-authority assets receive particularly strong immunity protection. They should not be treated as ordinary state commercial assets merely because they have financial value.

Can military assets be attached?

Military property and assets used for defence functions are generally protected from execution.

Can a state-owned company’s assets satisfy an award against the state?

Not automatically. Separate legal personality, ownership and the identity of the award debtor must be examined. A legal basis is required to disregard the separation between the state and company.

Can commercial state property be attached?

Potentially, where the property belongs to the award debtor, is located within the jurisdiction and is used or intended for non-sovereign commercial purposes.

Can a Turkish court grant interim attachment before the award?

Potentially, but pre-award attachment against state property faces strict immunity objections. Express consent and identification of commercial or earmarked assets are particularly important.

How are foreign awards enforced in Turkey?

Foreign arbitral awards may be enforced under the New York Convention or Articles 60 to 63 of Law No. 5718, subject to the applicable requirements and limited refusal grounds.

Are ICSID awards automatically executable against every state asset?

No. Article 54 facilitates recognition and enforcement of the award’s pecuniary obligations, but Article 55 preserves domestic law concerning immunity from execution.

Is an ICSID award reviewed under the New York Convention?

No. ICSID Convention awards follow the special recognition and enforcement system of the ICSID Convention.

Can service be made through the foreign state’s embassy?

Article 49 permits service on the foreign state’s diplomatic representatives in private-law disputes. The applicable procedural and treaty requirements should still be observed carefully.

Is recognition of the award enough to seize property?

No. Recognition or enforcement of the award and immunity from execution against a specific asset are separate legal questions.

Conclusion

Sovereign immunity and enforcement against state assets in Turkey require a structured, asset-specific analysis.

The first question is whether the foreign state enjoys immunity from jurisdiction.

Article 49 of Law No. 5718 adopts a restrictive rule by denying jurisdictional immunity in disputes arising from private-law relationships. A state entering a construction, supply, finance, consultancy or similar commercial contract may therefore be required to defend the resulting private-law claim.

The second question is whether the arbitral award can be recognised or enforced.

Non-ICSID awards may fall within the New York Convention or Turkish private international law. ICSID awards benefit from the special recognition framework in Article 54 of the ICSID Convention.

The third and most difficult question is whether a particular state asset may be subjected to coercive execution.

An agreement to arbitrate is not the same as consent to attach property. A court order recognising an award is not the same as an order permitting seizure of diplomatic, military or central-bank property.

The asset’s actual use is central.

Commercial receivables, rental income and business accounts may present stronger enforcement opportunities than embassy accounts, monetary reserves, military property or cultural objects.

Ownership must also be established.

An asset belonging to a separate state-owned enterprise is not automatically available to satisfy an award against the sovereign state. Conversely, an entity should not be used artificially to conceal state assets or frustrate an established award.

Contract drafting can reduce enforcement risk significantly.

The private party should obtain an express arbitration agreement, jurisdictional-immunity waiver, execution-immunity waiver, consent to interim measures and a clear identification of commercial assets or payment security.

Such clauses cannot guarantee seizure of legally protected property. They can nevertheless prevent the state from arguing that its consent extended only to arbitration and not to enforcement.

The most effective protection is often obtained before a dispute arises.

Escrow, bank guarantees, letters of credit, project-revenue assignments and designated payment accounts may provide more reliable security than attempting to identify attachable sovereign assets after obtaining the award.

A successful sovereign-enforcement strategy therefore begins with contract structuring, continues through careful service and arbitral procedure and ends with targeted enforcement against assets that are both legally owned by the debtor and genuinely used for commercial purposes.

Legal Disclaimer: This article is provided for general informational purposes only and does not constitute legal advice. Sovereign immunity and enforcement depend on the identity of the state or entity, contractual wording, applicable treaties, arbitral regime, asset ownership, asset use, location of property and mandatory public international law. Case-specific Turkish arbitration, private international law and enforcement advice should be obtained before seeking attachment or execution against foreign state property.