INTERNATIONAL ARBITRATION 1/3LY
MARKET COMMENTARY 11
T URKE Y: THE L INK BE T WEEN EUROPE AND A S I A
On 20 November last year, the Turkish parliament passed the Istanbul Arbitration Centre Law. This entered into force at the start of the year and will lead to the establishment of a long awaited centre to administer international arbitrations on the banks of the Bosphorus. The news is in line with Turkey’s aim to develop Istanbul, the largest city in the country, into a dominant centre for cross-border financial transactions, both in the region and globally. A “strategy and action plan” to bring about this transformation was adopted by Turkey’s High Planning Board in 2009, a key pillar of which was the formation of an independent arbitration centre to hear international disputes, the Istanbul International Arbitration Centre (ISTAC). The ability of the centre to compete with other regional centres on cost, speed and efficacy will be crucial to its success. C AN IT COMPETE? In establishing ISTAC, Turkey is seeking to capitalise on its logistical advantages as a “regional hub” linking Europe and Asia. The geographic location of the centre provides significant geopolitical and geostrategic advantages and its easy accessibility to international travellers, as well its attractive visa regime, should not be underestimated. Turkey’s buoyant and growing economy provides the right environment for an aspiring new disputes centre. It is worth noting, however, that uncertainty surrounding the political stability of the broader regionwill inevitably impact upon the centre’s success. Furthermore, if the centre is to compete with others in the region, it is of vital importance that Turkey has the appropriate legal framework in place and that the independence of the centre, and of the Turkish judicial system, is guaranteed. In recent years, Turkey has introduced a number of legislative changes to support arbitration, bringing its law in line with that of centres such as London, Paris and Dubai. The Turkish International Arbitration Law, adopted in 2001, is based on the UNCITRALModel Law. In the previous 12 years, Turkey acceded tomultinational treaties including the New York Convention, the ICSID Convention and the European Convention on International Commercial Arbitration, which entered into force in 1991, 1989 and 1992, respectively. IS INDEPENDENCE AN ISSUE? Questions have been raised as to the extent of ISTAC’s independence –something which is paramount to the centre’s credibility and success. Concern has surrounded the state’s involvement in funding the centre for the first year and the election process for the centre’s General Assembly, whichwill enable various governmental bodies to elect a determined number of members.
BY BEN KNOWLES, ALEC EMMERSON AND IAIN ROWL ANDS, CO-CHAIR GLOBAL ARBITRATION GROUP, CONSULTANT AND A SSOCIATE AT CLYDE & CO
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