The Istanbul Arbitration Centre (ISTAC) has provided dispute resolution services to Turkish and foreign entities through arbitration and other alternative dispute resolution processes since the introduction of the ISTAC Arbitration and Mediation Rules on October 26 2015.(1) On November 17 2017, approximately two years after it became operational, the Global Arbitration Review listed ISTAC among the "institutions worth a closer look" in its Guide to Regional Arbitration.(2) This recognition has strengthened ISTAC's aspiration to become a regional hub for dispute resolution for companies and individuals from Europe, Asia and the Middle East.(3) To better understand its development, this update discusses what ISTAC has accomplished to date.(4)
ISTAC received its first case within the first three months of becoming operational. The number of cases submitted between October 26 2015 and December 31 2015 represents 6% of all cases that ISTAC has received to date. Between January 1 2016 and December 31 2016 ISTAC received 27% of all cases submitted to date and between January 1 2017 and December 31 2017 it received 40% of all cases submitted to date. As a result, the number of cases submitted to ISTAC increased for a second consecutive year. More importantly, ISTAC received 27% of all cases submitted to date within the first two months of 2018. Drawing on the above figures, the number of cases submitted to ISTAC is expected to increase for the third consecutive year.
The claim amounts in the cases submitted to ISTAC range between TL15,000 (approximately €3,000) and TL800 million (approximately €163 million). The disputes in question involve different practice areas, including:
- sales contracts;
- construction contracts;
- service contracts;
- company law;
- intellectual property; and
- maritime law.
This wide range of claim amounts and practice areas shows that business people have begun to embrace ISTAC arbitration as a sound dispute resolution process, regardless of the claim amount and the subject matter of the dispute.
Of the parties in these cases, 16% were foreign and involved parties from Africa, the United Arab Emirates, France and India. This track record also strengthens ISTAC's aspiration to become a regional hub for dispute resolution. In addition, the parties in these cases were not limited to private entities (13% of the them were public entities). On November 19 2016 the Prime Ministry published a circular to incentivise the use of ISTAC arbitration for dispute resolution arising from contracts to be executed by public entities.(5) Further to this circular, the dispute resolution clauses in the Public Tender Law's standard agreements were amended.(6) Based on these amendments, public entities can choose ISTAC arbitration for dispute resolution arising from contracts to be executed further to the tender process. Accordingly, the number of cases involving public entities is expected to increase in future.
The composition of arbitral tribunals in cases submitted to ISTAC is promising in terms of gender diversity. In 30% of these cases, the chair was a woman and the sole arbitrator was a woman or a majority of the arbitral tribunal consisted of women.
Considering the above, ISTAC's track record from October 26 2015 to date illustrates that it has been developing all of the features needed to become a regional hub for dispute resolution and that it already has a promising track record.
For further information on this topic please contact Okan Demirkan or Cihan Mercan at Kolcuoglu Demirkan Koçakli Attorneys at Law by telephone (+90 212 355 9900) or email (firstname.lastname@example.org or email@example.com). The Kolcuoglu Demirkan Koçakli Attorneys at Law website can be accessed at www.kolcuoglu.av.tr.
(1) ISTAC's general assembly approved the ISTAC Arbitration and Mediation Rules on October 26 2015, which entered into force on the same date in accordance with the Law on the Istanbul Arbitration Centre 6570/2014.
(3) See https://istac.org.tr/en/about-us/.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.