It is no secret that Türkiye's administrative and commercial courts are operating under a heavy caseload. A commercial claim or a declaratory action typically takes three to five years to run from first instance through to a final decision. In an inflationary environment, that delay erodes the time value of money and leaves even the successful party materially worse off. Justice arrives, but late.
At Ertuğ & Partners, we draft our clients' contracts on the basis that state litigation is the last resort. We build alternative dispute resolution (ADR) mechanisms into the contract from the outset, because they deliver the two things commercial parties actually need: speed and confidentiality.
1. The Modern Precondition: Mandatory Mediation
Claims that could once be filed directly with the courts (commercial sales disputes, cheque and promissory note claims, lease terminations, employee claims and consumer disputes) can no longer go straight to trial.
Under Law No. 6325 and Article 5/A of the Turkish Commercial Code, mediation is a procedural precondition to litigation. The parties must first sit down with a mediator, either appointed by the state or chosen by them. If you file directly, the court dismisses the claim on procedural grounds without examining the merits.The value of confidentiality: Court proceedings are public; competitors and the press can follow your case, with the reputational exposure that brings. Mediation is confidential. Concessions offered, documents produced and weaknesses revealed in the room cannot later be used as evidence in court.A document with the force of a judgment: A settlement reached in mediation is more than a handshake. Where the settlement agreement is signed jointly by the parties, their lawyers and the mediator, it constitutes a document with the force of a court judgment without requiring an enforceability annotation (Article 18/4 of Law No. 6325). In that case you can proceed directly to enforcement against a defaulting party. If the agreement does not carry that combination of signatures (for instance where one party attended without counsel), an enforceability annotation must be obtained from the civil court of peace before enforcement. The distinction shows why attending with counsel is not merely a preference but a decision that affects the outcome.2. Arbitration: Private Adjudication Outside the Court System
You have signed the contract and shipped goods worth millions. You would rather not litigate in the state courts. The solution is an arbitration clause.
The moment you insert "Any dispute arising out of this contract shall be finally resolved under the rules of ISTAC (Istanbul Arbitration Centre) or the ICC (International Chamber of Commerce)," the dispute leaves the state court system. Two points of nuance are worth knowing. A court will not apply an arbitration clause of its own motion: if the other side files a claim, the arbitration objection must be raised as a preliminary objection within the time allowed for the statement of defence, failing which the court continues to hear the case. And an arbitration clause does not close off interim relief and interim attachment altogether, though the scheme in Article 414 of the Code of Civil Procedure is narrower than is often assumed. As a rule, during the arbitration it is the arbitrator or arbitral tribunal that grants interim relief. Application to the court is possible only where the tribunal cannot act in time or effectively; failing that, an application may be made only with the tribunal's permission or on the basis of the parties' written agreement to that effect. Interim relief sought from the court before the arbitration begins is not subject to that restriction and is not a breach of the arbitration agreement.Expertise: A state judge may hear a theft case, a divorce and a substantial IT dispute on the same day. In arbitration, you choose the decision-maker. In a construction dispute you can appoint an arbitrator who has spent thirty years on site and understands the law, which tends to produce more technically grounded decisions.No appeal on the merits: The substance of an arbitral award is not subject to appeal; you cannot take the file to a higher court on the basis that the arbitrator assessed the facts incorrectly. It is not correct, however, to say that the award escapes review altogether. A party may apply to have the award set aside. The procedure differs according to which statute governs the arbitration, and the distinction is frequently missed:Domestic arbitration (Article 439 of the Code of Civil Procedure): The application is made to the regional court of appeal at the seat of arbitration, within one month of notification of the award to the parties. Bringing the application does not suspend enforcement; on the application of a party, however, enforcement may be stayed against security covering the value of the sum or goods awarded.International arbitration (Article 15 of the International Arbitration Act): The competent court here is also the regional court of appeal. This point is often stated incorrectly: before the 2018 amendment by Law No. 7101 the application was made to the court of first instance, and the older position still circulates. Today the competent regional court of appeal is determined by reference to the location of the civil court of first instance having jurisdiction under Article 3 of the Act. The period is thirty days. The critical difference from domestic arbitration is this: in international arbitration, bringing the application automatically suspends enforcement of the award.The grounds are exhaustively listed under both statutes: invalidity of the arbitration agreement, irregularity in the appointment of arbitrators, an arbitrator exceeding jurisdiction, breach of the right to be heard, conflict with public policy. An assertion that the arbitrator assessed the facts incorrectly does not appear on that list.
Finally, an award cannot be enforced the moment it is signed. Once the period for setting aside has expired, the parties have waived that right, or the application has been finally dismissed, a certificate of enforceability must be obtained from the court. The process is independent of the state courts, but it is not entirely separate from them.
3. Multi-Tier Dispute Clauses: Negotiate First, Arbitrate If Necessary
The model we most often build into international group contracts is a multi-tier dispute resolution clause, escalating the dispute step by step. There is a narrower variant known as "Med-Arb", in which the same neutral acts first as mediator and then, if no settlement is reached, as arbitrator. The two should not be confused: in Med-Arb, information learned during the mediation phase remains with the person who will later decide the case, which raises questions of impartiality. In the structure below, each stage involves different people.
1. Direct negotiation: The parties' senior executives serve notice and must meet within 30 days to attempt a negotiated resolution.
2. Mediation: If the executives cannot resolve matters, an independent mediator is appointed, with the process limited to 45 days.
3. Arbitration: If mediation fails, the file proceeds to arbitration before ISTAC or the ICC. The dispute is resolved without entering the state court system, typically within six to eight months.
4. A Warning on Pathological Clauses
The most common drafting error is to copy a clause from the internet reading: "The Istanbul Courts and ICC Arbitration shall both have jurisdiction over disputes."This is what practitioners call a pathological clause. A contract cannot confer jurisdiction on both the state courts and an arbitral tribunal. When the other side objects to jurisdiction, the file stalls and months are lost arguing over who should hear the case.An arbitration clause should specify, clearly: the seat of arbitration, the governing law, the number of arbitrators, the language of the proceedings, and whether the arbitration is institutional or ad hoc.5. Cross-Border Enforcement: The New York Convention
Enforcing a Turkish court judgment against a debtor's bank accounts in Germany is difficult: recognition of foreign judgments depends on each country's own procedure and often on a reciprocity requirement, and the process is slow.
An arbitral award changes the picture. More than 170 states are party to the 1958 New York Convention, which establishes a common and narrow framework for the recognition and enforcement of foreign arbitral awards: enforcement may be refused only on the limited grounds set out in the Convention, such as an invalid arbitration agreement, breach of the right to be heard, or conflict with public policy.
One common overstatement deserves correction here. The New York Convention does not give you a right of direct attachment. To enforce the award you must still obtain an enforcement decision in the country where the debtor's assets are located. What the Convention provides is that this process is predictable, standardised and does not reopen the merits. That is why arbitration is preferred in cross-border trade.
This report offers a strategic perspective on alternative dispute resolution and does not substitute for legal representation in a specific contractual dispute.
Last updated: 10 August 2026.
