ARBITRATION TYPES SERIES – 5 / INTERNATIONAL ARBITRATION

This week, we will continue the arbitration series with “International Arbitration”. International arbitration is the resolution of disputes between states and private individuals by an independent arbitration board, outside of state courts. In this process, the dispute between the parties is decided by one or more arbitrators. Arbitration is an alternative dispute resolution method in which the parties can apply to arbitrators of their own choosing and the intervention of state courts is limited. 

International arbitration plays an important role in international relations, especially trade, investment agreements, contracts and border disputes. The most common international arbitration institutions include the International Chamber of Commerce (ICC) and the United Nations Commission on International Trade Law (UNCITRAL). The decisions made in arbitration are generally binding and can be enforced based on mutual agreements between countries. 

International arbitration in Turkey plays an important role in the resolution of commercial disputes in particular. International arbitration is an alternative resolution method that allows the parties to resolve their disputes before an independent arbitration board instead of national courts. The most important regulations regarding international arbitration in Turkey are made by the Turkish Commercial Code No. 6102 (TTK) and the regulations regarding International Commercial Law dated 2016. Turkey is a party to the New York Convention, the “International Trade and Investment Arbitration Convention” dated 1958, and has paved the way for the establishment of a system that can replace the courts in international arbitration. 

Some of the prominent elements regarding international arbitration in Turkey are as follows: 

1. Turkish Commercial Code (TTK): Turkey allows arbitration in the resolution of international commercial disputes. The arbitration regulations in the 4th book of the TCC allow the parties to determine the terms of arbitration by recognizing the freedom of contract.
2. İstanbul Arbitration Center (ISTAC): It is an important center for arbitration in Turkey. Established in 2015, Istanbul Arbitration Center hosts both national and international arbitration activities. ISTAC offers a safe and fast arbitration solution for local and foreign investors.
3. New York Convention (1958): Turkey, as a party to this convention, has made an important commitment to the recognition and enforcement of international arbitration awards. The convention facilitates the recognition and enforcement of arbitration awards worldwide.
4. Arbitration Agreement and Selection of Arbitrators: Parties can select an arbitrator to resolve disputes by entering into an arbitration agreement. Arbitration practices in Turkey are widely used, especially in the trade and construction sectors.
5. Turkey’s Arbitration Policies: Turkey attaches importance to the arbitration system in order to support the development of both domestic and foreign trade. In addition, innovations are constantly being added to the regulations regarding arbitration in order to ensure a fair judicial process. 

International arbitration practices in Turkey allow the parties to go through a fast, confidential and more flexible resolution process. This offers a significant advantage for both domestic and international trade. 

International arbitration in the world is a resolution method applied by special arbitration boards instead of courts in resolving disputes in the international arena. This method ensures that disputes between parties are resolved by independent and impartial arbitrators. International arbitration is generally used in areas such as commercial, investment, maritime, construction and energy.

Some of the important international arbitration centers in the world are as follows: 

1. International Chamber of Commerce Arbitration Court (ICC): Located in Paris, ICC is one of the most important and oldest arbitration organizations in the world. It is widely used for trade disputes.
2. London Court of International Arbitration (LCIA): Located in the United Kingdom, this institution is an important center for commercial disputes.
3. International Center for Settlement of Investment Disputes (ICSID): Part of the World Bank, ICSID is used to resolve disputes between states and foreign investors in particular.
4. Stockholm Chamber of Commerce Arbitration Center (SCC): Located in Sweden, SCC is an important center for resolving commercial disputes, especially in the European, Asian and African regions. 

International arbitration is frequently preferred, especially in international areas such as trade, investment and maritime. It usually works as follows: 

1. Arbitration Agreement or Clause: The parties agree to resort to arbitration in the event of a dispute. This is usually provided by an arbitration clause added to trade contracts.
2. Arbitration Institutions: There are various arbitration institutions around the world. These are institutions that determine the arbitrators chosen by the parties and ensure that the process is carried out in an orderly manner.
3. Arbitration Process: The parties choose one or more arbitrators. The arbitrators conduct an impartial review and make a decision to resolve the dispute. This decision is usually binding and can be enforced in a manner similar to court decisions.
4. Advantages:
   1. • Fast Resolution: It can be concluded in a shorter time compared to courts.
      • Confidentiality: The arbitration process is usually kept confidential, which helps protect trade secrets.
      • Flexibility: The parties can adapt the arbitration process to their own needs, for example, they can agree on the number of arbitrators, location, language, etc.
5. Challenges:
   1. • High Costs: Arbitration, especially international arbitration, can sometimes lead to high costs.
      • Enforcement Difficulties: If arbitration decisions are not applied in the same way in every country, it can be difficult to enforce them. 

As a result, international arbitration offers an effective solution to commercial relations and investment disputes worldwide. However, it is important for the process to proceed smoothly by clearly defining the terms of arbitration before a dispute arises between the parties. It is frequently preferred in commercial and investment disputes due to the advantages it offers such as trust, confidentiality, rapid resolution and international recognition between the parties.

Sources:

https://www.ahmetekin.av.tr/milletlerarasi-tahkim/

Hacı, CAN, “Milletlerarası Tahkim Hukuku”, Seçkin Yayınevi, Ekim, Ankara, 2024.

Prof. Dr. Ziya, AKINCI, “Milletlerarası Tahkim”, 6.baskı, Vedat Kitapçılık, İstanbul, 2021.

https://www.cooley.com/news/insight/2022/2022-12-31-what-is-international-arbitration

https://en.wikipedia.org/wiki/International_arbitration

https://www.pon.harvard.edu/daily/international-negotiation-daily/international-arbitration-what-it-is-and-how-it-works/

https://gun.av.tr/insights/articles/international-arbitration-in-turkey

https://iccwbo.org/dispute-resolution/dispute-resolution-services/icc-international-court-of-arbitration/

https://www.international-arbitration-attorney.com/what-is-international-arbitration/

https://www.cooley.com/news/insight/2023/2023-07-31-the-main-institutions-of-international-arbitration

https://www.rh-arbitration.com/arbitration-and-investment-law/what-is-international-arbitration/