INTERNATIONAL ARBITRATION 1/3LY
MARKET COMMENTARY 13
Opposition to the centre’s general assembly electionmechanism resulted in the process being challenged as a breach of the Turkish constitution, with 123members of the Turkish legislature filing a petition to overturn the statute establishing the new centre. The challenge was unsuccessful, however, with the court citing that the new centre is not established by the constitution and, therefore, its structure is within the discretion of the legislature. The decision of the court may help to allay fears over autonomy. Also alleviating concerns will be the appointment of Mr. Ziya Akinci as first Chairman of the new centre. Mr. Akinci’s electionwas, in effect, proposed by Turkey’s private sector and his appointment, a four year term, is in preference to a government appointee. Mr. Akinci is currently seeking guarantees that the local courts will support the arbitral framework, further ensuring the integrity of the process. Such guarantees are important given the relative infancy of the Turkish courts in developing their approach to setting aside arbitration awards. However, recent decisions appear to suggest a continuing trajectory towards an arbitration compatible approach. Government influence is undoubtedly a possibility but it is not yet known how far this will play out in practice. WhileMr. Akinci will lead the teamchargedwith tasks including, drafting the institution’s first set of arbitration rules, the appointment of further personnel is nowawaited with great interest. The formation of an effective secretariat, plus the perceived independence of arbitrators and, crucially, a robust list of candidates, will all be paramount to the centre’s credibility and success.
WHAT LIES AHE AD? Istanbul seems to tickmany of the boxes required for a successful arbitration centre and, indeed, there is no shortage of cases with a Turkish element following significant growth in recent years. However, the jury is still out in relation to independence, which is likely to determine the ability of Istanbul to compete with rival arbitration centres in the region, especiallywith relatively young arbitration centres such as Dubai which have a head start in that they have developed something of a reputation and portfolio of cases. The long term funding of ISTAC is another potential issue, particularly if the centre does not quickly become self-sufficient through generating its own income – potentially byway of private investors. If funding continues to be required, it will be interesting to see where it is sourced from after the first year. ISTAC’s prospects of success appear to be good, and recent developments are positive, but, with a lack of a significant track record of arbitration in Turkey, only time will tell. The proposed rules of arbitration, which are scheduled to be published imminently, are awaitedwith great anticipation in advance of the proposed commencement of operations at the end of the year. A successful track record is likely to be the best way to enhance the reputation and awareness of the new centre in order to drive usage.
A VERSION OF THIS ARTICLE WA S FIRST PUBLISHED IN GLOBAL ARBITRATION RE VIEW, JANUARY 2015.
THE FORMAT ION OF AN EFFECT I VE SECRETARI AT, PLUS THE PER CE I VED INDEPENDENCE OF ARBI TRATORS AND A ROBUS T L I S T OF C ANDIDAT ES , WILL ALL BE PARAMOUNT TO THE CENTRE ’ S CREDIBIL I T Y AND SUCCESS .
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