Latest News on Istanbul Arbitration Center (ISTAC): ISTAC Arbitration Rules

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Istanbul Arbitration Center is established on 1 January 2015 with Law No. 6570.

Istanbul Arbitration Centre Arbitration and Mediation Rules came into force on 26 October 2015 and are now published on ISTAC’s official website1 Arbitration Rules are comprised of 6 Parts and 45 Articles governing the entire arbitration procedure.

Article 1 of the Rules states that “The Istanbul Arbitration Centre is an independent arbitration institution, which has been established to provide institutional arbitration services”. ISTAC Arbitration Rules will be applicable “where parties have agreed to submit their disputes to the ISTAC Arbitration Rules” (Art. 2 of the Rules)

ISTAC has been considered as part of Istanbul Financial Center project which had three objectives in dispute resolution: Fast, specialised and low-priced procedure.

In conformity with these purposes; Fast Track Arbitration Rules (9 Articles) has been published together with the Arbitration Rules for the first time in Turkey. With this new procedure, disputes will finally be settled within 3 months. (ISTAC Fast Track Arbitration Rules, Art. 7)

Secondly, “unless otherwise agreed by the parties, the sole arbitrator or arbitral tribunal will immediately draw up a document defining its terms of reference following the submission of the request for arbitration and answer to request for arbitration”. The terms of reference shall include a “summary of parties’ claims and defences and the relief sought by each party together with the amounts of any quantified claims and if the sole arbitrator or arbitral tribunal considers it appropriate, a list of issues to be determined” (Art. 26 of the Rules)

In addition, “during the drawing up of the terms of reference, the sole arbitrator or arbitral tribunal, after consulting with the parties, will establish a procedural timetable; particularly to establish a schedule for submission of statements schedule, the date of the hearing and dates of the other procedural issues it deems appropriate”. Hence as soon as the arbitration case is accessible to the sole arbitrator or the arbitral tribunal, a procedural road map will be available to the parties. (Art. 27 of the Rules)

In all the other situations, “the time limit for making the award on the merits of the dispute is 6 months from the date of completion of the signatures on the terms of reference or, the date of notification to the sole arbitrator or arbitral tribunal by the Secretariat of the approval of the terms of reference”. In exceptional circumstances, “the time limit for the award may be extended upon the agreement of the parties; and if the parties fail to agree, upon requests of the sole arbitrator or arbitral tribunal or by the Board of Arbitration on its own initiative in cases where it is deemed necessary” (Art. 33 of the Rules).

The parties may choose the sole arbitrator or the arbitral tribunal. In cases the parties fails to appoint the arbitrator(s), ISTAC’s Board of Arbitrator shall appoint the arbitrator(s). In both cases, the arbitrator(s) should be specialised in the dispute in question. (Art. 14 of the Rules). “When appointing the arbitrator, the Board of Arbitration shall take into consideration (…) the prospective arbitrator(s) ability to conduct the arbitration proceedings”. (Art. 15 of the Rules)

Furthermore arbitration costs and fees foreseen by the ISTAC Arbitration Rules are always lower than the court fees required by the State Courts in Turkey, whatever the amount required in dispute is (Istanbul Arbitration Centre Rules on Costs and Fees, Appendix-3). 2
Istanbul Arbitration Center Emergency Arbitrator Rules (Appendix-1) has also been adopted with the Rules which allows “a party that needs urgent interim or conservatory measures that cannot await the Sole Arbitrator or Arbitral Tribunal to begin its duty to apply to the Secretariat pursuant to the Istanbul Arbitration Center Emergency Arbitrator Rules” (Emergency Arbitrator Rules, Appendix-1).
Arbitration Rules being briefly observed, I would like to highlight the similarity of the procedural framework of ISTAC Rules to the most commonly used modern institutional rules such as ICC Rules of Arbitration, 2012; LCIA Arbitration Rules, 2014 as well as UNCITRAL Arbitration Rules.

It is also worth to mention that International Board of Arbitration of ISTAC includes one of the best known international arbitrators such as Jan Paulsen and Hamid Gharavi. 3

The Rules also suggests a sample arbitration clause as follows:
“All disputes arising out or in connection with the present contract shall be finally resolved by arbitration under the Rules of Arbitration of the Istanbul Arbitration Center.
The parties may also wish to include in the arbitration clause the provisions below:
The emergency arbitrator provisions shall not apply.
The seat/ place of arbitration is (City, Country).
The language of the arbitration is (…).
The number of arbitrators will be (…).
The law applicable to the merits of the dispute is (…)”

1<http://istac.org.tr/wp-content/uploads/2016/01/ISTANBUL-TAHKIM-MERKEZ%C4%B0-TAHK%C4%B0M-ve-ARABULUCULUK-KURALLARI.pdf> accessed on 19 January 2016.
2 Prof. Dr. Ziya Akıncı, President of Istanbul Arbitration Center, Information Meeting Regarding ISTAC on 8 December 2015 at Turkish Capital Markets Association.
3 ibid.