THE AUTHORS:
Emel Özaltun, Legal Counsel
Elif Kapısız, LL.M. Graduate from the University of Geneva
This article was featured in Jus Mundi‘s 2025 Arbitration Year in Review, an annual publication analyzing arbitration developments across 40+ jurisdictions on 6 continents. This edition brings together young practitioners and senior experts to capture the year’s most significant legislative reforms, enforcement trends, and institutional innovations.
Throughout 2025, Türkiye continued to feature prominently in both investment and commercial arbitration developments. While no new investment treaty claims were initiated by or against Türkiye, several ongoing cases saw significant procedural and enforcement milestones. Turkish investors remained active in international fora, with key decisions issued in cases involving Libya and other states. Domestically, Türkiye’s role as a respondent also remained under close observation, particularly in relation to ongoing proceedings at the ICSID (International Centre for Settlement of Investment Disputes).
At the same time, 2025 was an equally active year for international commercial arbitration involving Türkiye. Although no legislative amendments were adopted, Turkish courts delivered a number of significant, detailed decisions on key arbitration issues. These included the validity and scope of arbitration agreements, the recognition and enforcement of foreign arbitral awards, and the availability of interim measures, particularly provisional attachment orders, issued in support of foreign arbitral proceedings. Collectively, this growing body of case law signals an increasingly sophisticated and arbitration-supportive judicial approach, clarifying established principles while also shaping emerging trends that will influence how parties draft contracts and conduct their disputes.
Recent Developments in Investment Treaty Arbitration
Bilateral Investment Treaties (“BITs”)
No new BITs were signed or entered into force in 2025.
Disputes
Disputes Involving Türkiye
No new investment treaty claims were filed against the Republic of Türkiye in 2025. However, existing proceedings saw notable developments.
On 14 September 2025, Canada-based Alamos Gold announced the sale of its Turkish mining investments to Tümad Madencilik, a subsidiary of Nurol Holdings, for USD 470 million. The transaction is expected to lead to the discontinuance of Alamos Gold v. Türkiye, an ICSID arbitration initiated in 2021 under the Netherlands–Türkiye BIT(1986). The underlying dispute, valued at over USD 1 billion, concerns the state’s alleged refusal to renew permits for a gold and silver mining project in northwestern Türkiye.
Subsequently, on 7 October 2025, an ICSID tribunal in ENCORE v. Türkiye rejected Türkiye’s application for expedited dismissal under Arbitration Rule 41. The tribunal found that Türkiye had not demonstrated that the claims were manifestly without legal merit. The case concerns the alleged expropriation of Encore’s minority shareholding in Muradiye Elektrik Üretim A.Ş., a hydropower company in Van, following Turkish court decisions confiscating shares over alleged links to terrorist organisations.
Disputes Involving Turkish Investors Abroad
Turkish investors also saw progress in long-standing disputes abroad.
On 18 March 2025, the claimant in Sistem v. Kyrgyz confirmed that Kyrgyzstan had fully satisfied its payment obligations arising from the 2009 ICSID Additional Facility award and subsequent U.S. court judgments. The acknowledgment, filed before the U.S. District Court for the Southern District of New York, marked the final resolution of a protracted dispute concerning the expropriation of a hotel investment in Bishkek.
Court Decisions
2025 also saw several important court rulings in enforcement proceedings brought by Turkish investors, particularly against Libya.
On 4 February 2025, the U.S. District Court for the District of Columbia confirmed the arbitral award in Etrak v. Libya, rejecting Libya’s motion to stay the case pending enforcement actions elsewhere. The court found it had jurisdiction under the Foreign Sovereign Immunities Act’s (“FSIA”) arbitration exception and that parallel proceedings abroad did not justify suspension under the New York Convention. The court also dismissed Libya’s res judicata objection and, on 3 March 2025, entered judgment in favour of Etrak for approximately USD 30 million, plus post-judgment interest.
Shortly thereafter, on 12 February 2025, France’s Cour de Cassation upheld the Paris Court of Appeal’s decision confirming the validity of the ICC (International Chamber of Commerce) award in Cengiz v. Libya, rejecting Libya’s annulment bid. The court found no excess of powers or legal error in the lower court’s determination that Libya’s corruption allegations related to the merits rather than jurisdiction and upheld the tribunal’s attribution of armed-group activity during the Arab Spring to the state. The decision leaves intact the 2018 award of approximately USD 50 million in favour of Turkish investor Cengiz.
On the same day, the Cour de Cassation also dismissed Libya’s appeal in Nurol v. Libya, confirming the validity of a partial ICC award that upheld jurisdiction under the Libya–Türkiye BIT (2009). The court affirmed that the treaty had duly entered into force, that the dispute arose after its entry into force, and that Libya’s corruption allegations pertained to the merits. Libya was ordered to bear the costs.
Later in the year, on 19 September 2025, the US District Court for the District of Columbia granted Etrak’s motion for post-judgment discovery, ordering Libya to produce documents by 3 November 2025 and warning that non-compliance could result in escalating fines. The decision forms part of Etrak’s ongoing global enforcement campaign of its 2019 BIT award against Libya.
Developments in Commercial Arbitration
Although 2025 did not bring any legislative amendments in the field of international arbitration, it has nevertheless been an active year for commercial arbitration in Türkiye from a case-law perspective. Turkish courts at all levels have continued to deliver detailed and well-reasoned decisions on core issues such as the validity and scope of arbitration agreements, the recognition and enforcement of foreign arbitral awards, and the use of provisional measures in support of arbitration. Taken together, these judgments not only clarify existing principles but also signal emerging trends in the judicial approach to arbitration, and they are likely to influence how parties structure their contracts and conduct their disputes in the years ahead.
Case Law
Provisional Attachments in Foreign Arbitral Awards
In its decision numbered 2025/259, 2025/265, dated 18 March 2025, the 31st Civil Chamber of the Ankara Regional Court of Appeal considered when Turkish courts may grant provisional attachment orders based on a foreign arbitral award that has not yet been recognized or enforced in Türkiye. The dispute arose from an ICC arbitration conducted outside Türkiye, which resulted in an award ordering the respondent to pay approximately USD 1.84 million. Relying on this award, the claimant initiated recognition and enforcement proceedings before the Ankara 14th Commercial Court of First Instance and, at the same time, requested a provisional attachment over the respondent’s assets located in Türkiye.
The Court of First Instance accepted the request and ordered a provisional attachment over the respondent’s movable and immovable assets and receivables up to the Turkish Lira equivalent of the awarded amount. Initially, the court treated the foreign arbitral award as equivalent to a domestic court judgment and therefore did not require the claimant to provide any security. The respondent objected, arguing that the award had not yet been declared enforceable in Türkiye and therefore did not constitute a due and payable claim within the meaning of the Enforcement and Bankruptcy Law. The respondent further argued that granting an attachment at this stage risked prejudging the outcome of the recognition and enforcement proceedings.
Upon examining the objection, the Court of First Instance partly revised its position. It held that the arbitral award established a specific and determined monetary claim and that, in principle, the conditions for provisional attachment were satisfied. However, it accepted that, until recognition and enforcement were granted, the award could not be equated with a domestic judgment. Accordingly, the claimant could not benefit from an attachment without providing security. The court therefore decided to maintain the attachment but made it conditional on the claimant depositing security equal to 15% of the Turkish-Lira equivalent of the claim.
The respondent applied to the Ankara Regional Court of Appeal, reiterating its arguments that there was no “matured” debt until the foreign award was formally enforced and that granting attachment at this stage gave the claimant the practical benefits of enforcement in advance. The claimant opposed the appeal, noting that it had already deposited the required security and that all statutory requirements for a provisional attachment were satisfied.
The Ankara Regional Court of Appeal rejected the appeal and upheld the decision of the Court of First Instance. It confirmed that a foreign arbitral award may be relied upon to demonstrate the existence of a monetary claim for the purpose of granting a provisional attachment, even before formal recognition and enforcement, provided that the claimant furnishes appropriate security. At the same time, it emphasized that such an award cannot be treated as a domestic judgment allowing attachment without security until an enforcement decision is rendered in Türkiye.
This judgment reflects a balanced approach. Turkish courts are willing to support arbitral awards rendered outside Türkiye by granting protective measures at an early stage, while also protecting respondents’ interests by requiring claimants to provide security until the award has acquires the status of an enforceable judgment in Türkiye. The decision is final and cannot be challenged through an ordinary legal remedy.
Arbitration Agreement in Foreign Language and Defense Rights
In its decision numbered 2024/6135, 2024/8652, dated 4 December 2024, the 11th Civil Chamber of the Court of Cassation examined a dispute arising from a commercial contract dated 11 September 2019. The contract contained an arbitration clause referring disputes to an arbitral tribunal under the rules of the Grain and Feed Trade Association in London, with English law as the governing law. The tribunal rendered an arbitral award on 9 September 2020 in favor of the claimant. The claimant subsequently applied to the Turkish courts for recognition and enforcement of this foreign arbitral award under the New York Convention and Law No. 5718 on International Private and Civil Procedure.
The respondent objected to recognition and enforcement on two principal grounds:
- it argued that the arbitration clause and the contract were invalid because the contract was drafted in English in a single copy, allegedly in violation of Law No. 805 on the mandatory use of the Turkish language in commercial enterprises, and
- it claimed that its right of defense had been violated during the arbitration, asserting that the arbitral tribunal failed adequately to consider its submissions and evidence, amounting to a breach of public policy.
The Konya 1st Commercial Court of First Instance rejected these objections and granted recognition and enforcement of the arbitral award. The court found that none of the refusal grounds listed in the New York Convention or in Law No. 5718 were met. It noted, in particular, that the respondent had been given an opportunity to present its defense and had submitted petitions, which the arbitral tribunal received in May and June 2020. Regarding Law No. 805, the court held that the law does not apply to contracts between a Turkish company and a foreign company and that a party that has signed an English-language contract cannot later rely on that choice of language to invalidate its own agreement, as doing so would constitute an abuse of rights.
The Konya Regional Court of Appeal, 6th Civil Chamber, upheld the decision. It emphasised that the dispute had a foreign element because the claimant was not a Turkish company. Under Article 1 of Law No. 805, the law applies only when both parties are Turkish. Therefore, the use of English in the contract and arbitral proceedings did not violate Law No. 805. The Regional Court also observed that the respondent had been duly informed of the arbitration, had appointed counsel and had been able to submit evidence and arguments, so its right of defense had not been restricted. As none of the refusal grounds under Article 62 of Law No. 5718 were present, the Regional Court dismissed the appeal.
On further appeal, the Court of Cassation confirmed the lower courts’ approach. It recalled that it may set aside a regional court decision only if one of the grounds listed in Articles 370 and 371 of the Code of Civil Procedure (Law No. 6100) is present. Finding no such ground, the Court of Cassation therefore rejected the appeal and upheld the decision.
This judgment clarifies two practical points for parties seeking to enforce foreign arbitral awards in Türkiye:
- Law No. 805 will not normally be accepted as a reason to invalidate an arbitration clause where at least one party is a foreign company, and
- Turkish courts are reluctant to refuse enforcement on the basis of alleged violations of the right of defense where the party was properly notified of the arbitration, represented by counsel, and has had a real opportunity to present its case. In such circumstances, complaints concerning the arbitral tribunal’s assessment of evidence are unlikely to be treated as a public policy obstacle to recognition and enforcement.
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ABOUT THE AUTHOR
Emel Özaltun is a Turkish-qualified lawyer with seven years of experience in the field of international arbitration. She holds an LL.M in Comparative and International Dispute Resolution from Queen Mary University of London. Her expertise basically covers complex international construction and investment arbitration cases, including pre- and post-arbitral management. Emel advises both contractors and subcontractors on non-contentious matters concerning international construction contracts and holds considerable experience in the management of FIDIC contracts.
Elif Kapısız is a Turkish-qualified lawyer. She holds an LL.M. in International Dispute Settlement (“MIDS”) from the University of Geneva and the Graduate Institute, where she was awarded the Lévy Kaufmann-Kohler Scholarship, and an LL.M. in Private Law as well as an LL.B. from Galatasaray University. Her practice focuses on international commercial and investment arbitration, and she has experience with leading arbitration teams in Paris and London, handling complex cross-border disputes across the energy, construction, and pharmaceutical sectors.
*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.
