THE AUTHOR:
Umar Oseni, Secretary-General of the Organisation of Islamic Cooperation Arbitration Centre (“OIC“)
In the landscape of international arbitration, recent developments have shown the increasing significance of geopolitical strategies with the rise of some notable arbitration seats. The shifting geography of power within the 57-member region of the Organization of Islamic Cooperation (“OIC”) has again been brought to the limelight. On April 16, 2026, the Presidency of the Republic of Türkiye issued Presidential Circular 2026/3 (İslam İşbirliği Teşkilatı Tahkim Merkezi ile İlgili 2026/3 Sayılı Cumhurbaşkanlığı Genelgesi), otherwise known as “The Presidential Circular No. 2026/3 Regarding the Organisation of Islamic Cooperation Arbitration Centre”. The Circular signals a strategic transition from a mere institutional availability to an active state-endorsed independent platform for dispute resolution.
The OIC Arbitration Centre was established pursuant to the resolutions of the 32nd, 33rd, and 34th sessions of the Standing Committee for Economic and Commercial Cooperation of the OIC (“COMCEC”) and the 43rd, 44th, and 45th sessions of the Council of Foreign Ministers of the OIC. Through subsequent relevant resolutions of the Council of Foreign Ministers of the OIC and COMCEC, the OIC member states have been consistently encouraged to utilize the OIC-AC for the resolution of their commercial and investment disputes.
While the OIC Arbitration Centre was established by the private sector arm of the OIC as the main international dispute resolution centre within the legal ecosystem of the OIC for the resolution of both commercial and investment disputes, this formal policy directive from Türkiye – a key OIC member – is a major boost to the increasing operations of the Istanbul-based centre. Having designated the OIC-AC as the preferred forum for public-sector disputes involving counterparties in the OIC region, Türkiye is leading the way for other OIC member states to formally adopt the centre to promote a neutral platform that represents their unique economic and cultural realities.
Anatomy of the Circular: Mandates and Jurisdictional Reach
As a high-level policy directive issued by the Presidency of the Republic of Türkiye, the Presidential Circular 2026/3 is grounded in the legal foundation established by Presidential Decision No. 2064 of 2020, which approved the international Agreement between the private sector arm of the OIC – the Islamic Chamber of Commerce, Industry and Agriculture (“ICCIA”) and the Government of the Republic of Türkiye. Amidst ongoing trade volatility in the region, this policy directive reinforces the ties within the OIC itself.
What the Circular Mandates
This policy directive is a call to action for the Turkish public sector, and it extends to state-owned or state-affiliated commercial entities. As a first step, such institutions and organizations are required to ‘duly consider’ the OIC Arbitration Centre while drafting or entering into both domestic and international contracts.
In practical terms, public entities are required to ensure standardization of clauses by adopting the OIC-AC arbitration and mediation rules in their contracts. This has broader implications for efficiency and economy. Apart from compensation and damages paid by state entities, government entities across the world spend billions of dollars on legal costs annually. Apart from the Expedited Procedure introduced in its Arbitration Rules to ensure efficiency and its top-notch International Court of Arbitration with membership comprising renewed international arbitrators, the centre had adopted a policy to make arbitration and mediation accessible to all with its highly subsidized arbitration costs. This approach is recognized in the Presidential Circular, which emphasizes that the Centre provides a framework that is “effective, expeditious and economical”.
Beyond the inclusion of the OIC-AC in all contracts, the Circular addresses pending disputes where parties are encouraged to opt for the services of the Centre to immediately trigger the Centre’s jurisdiction. Such is possible for emerging disputes where it is expected that parties will elect to proceed to utilize the platform of the OIC-AC through submission agreements. Based on the text of the Circular, “it is sufficient for them to agree that disputes that have arisen or may arise between them shall be resolved in accordance with the arbitration or mediation rules of the OIC Arbitration Centre.”
The Circular recognizes the recent global activities and visibility of the Centre in its quest to become a global thought leader through training and advisory services in international arbitration. The Circular also emphasizes the secretarial support provided by the Center in arbitration and mediation proceedings as an appointing authority with its state-of-the-art hearing rooms at its headquarters in Istanbul.
To Whom Does It Apply
In the text of the Circular, the primary directive is aimed at “public institutions and organizations”, which is generally interpreted to include state-owned, state-affiliated companies and public-private partnership (“PPP”) projects. The jurisdiction of the Centre is reaffirmed by the policy directive with clear reference to investment and commercial disputes, which provides the basis for the private sector’s adoption of the Centre.
Therefore, all foreign or domestic entities entering contracts such as a PPP, procurement contracts or even a joint venture with any Turkish state entity are expected to include the OIC-AC clause in their contracts. The category of public institutions and organizations extends to Special Purpose Vehicles established purely for sovereign debt issuances; hence, practitioners are required to ensure that they stipulate the OIC-AC in all contracts relating to sovereign debt issuances involving bonds and sukuk. This non-negotiable standard will help streamline the process of dispute settlement, enhance the predictability of the process and ensure the certainty of the outcome.
Though the Circular expressly mentions public institutions and organizations, it implicitly also encourages the private sector to utilize the OIC-AC in resolving their relevant commercial disputes, since many private sector players do have some contractual engagements with state-owned companies, particularly in complex construction projects. In addition, Turkish companies operating or seeking to operate in OIC member states can choose to subject their cross-border investment operations to a predictable and certain Istanbul-based independent platform.
Implications for OIC Member States
One important point highlighted in the Circular is the fact that the OIC-AC is the first and only arbitration centre established through an international agreement in Türkiye. Such international status of the OIC-AC as an international organization, as documented in its Host Country Agreement, reinforces its independence with international legal immunity, functional separation in international organizational structure and neutrality in investor-state disputes.
The Circular also emphasizes that the Centre “provides services for the resolution, through arbitration or alternative dispute resolution methods, of commercial and investment disputes involving natural or legal persons from all states, whether or not they are members of the OIC, that are referred to the Centre.” Accordingly, non-OIC member states can also refer disputes to the Centre. Similarly, disputes involving some investors against non-OIC member states can also be referred to the Centre.
For the wider OIC region, since the OIC-AC was established by the main private sector arm of the OIC in contemplation of being designated as the main organ for dispute settlement under the OIC Investment Treaty (1981), this latest move provides a good basis for other jurisdictions to follow suit.
Since August 2024, the Government of the Republic of Türkiye has begun to include the OIC-AC as one of the main dispute resolution forums for all investor-State disputes in every Bilateral Investment Treaty (“BITs”) signed by the government with other countries. So, despite the ambiguities in the 1981 OIC Investment Agreement regarding dispute settlement, the inclusion of the OIC-AC in BITs signed by some member countries will provide easy access for investors to pursue their legal claims through a predictable and certain process.
The Global Trend: Regional Hubs and Institutional Preference
The directive marks a significant push by a major OIC member state to present Istanbul as a global hub for alternative dispute resolution (“ADR”) in an era marked by high trade volatility and global uncertainties in international trade. It is believed that this latest move is meant to reduce the historical reliance of Muslim-majority countries on Western arbitration seats, while highlighting the progress made by the OIC-AC that has its origin in the region’s private sector.
The global trend of decentralization of arbitration from the known dominant seats to regional expertise is not new. The OIC-AC, being part of the legal ecosystem of the largest intergovernmental body in the world after the United Nations, is better positioned to enhance regional expertise and cultural alignment in international dispute settlement. The institutional preference adopted in the Circular aligns perfectly with the UNCITRAL Model Law principles.
While promoting regional expertise and strategic cultural alignment, the OIC-AC is also aligned with international best practices, being a member of the Working Group II (Dispute Resolution) and Working Group III (Investor-State Dispute Settlement) of the United Nations Commission on International Trade Law (“UNCITRAL”). With the centre’s active involvement in ongoing global reforms in dispute resolution, it provides a new regional hub offering modern ADR norms and new ways of resolving disputes.
For instance, the Centre announced its Dispute Prevention and Mitigation (“DPM”) solutions in January 2025, which is a global first for international arbitration centres. The centre seeks to provide a strategic platform for investor-claimants and State representatives to actively engage with each other in a neutral platform during the usual ‘cooling-off’ period in BITs once a Notice of Dispute has been served. This unique solution is expected to help parties involved in investor-state disputes resolve their dispute amicably with the help of early neutral evaluators who are experts in the subject matter of the dispute. The centre has also introduced several DPM solutions for the private sector through strategic consultancy engagements, including Dispute Triage & Pathfinding and Litigation Risk Management.
Investor Impact: Certainty in OIC-Related Transactions
Given the importance of certainty in contractual engagements, particularly in investment-related contracts, foreign investors would benefit from an additional layer of protection and predictability when they include the OIC-AC clause in their contracts with Turkish public entities. Even if such foreign investors exclusively involve dealings with Turkish private entities, since their statuses in Türkiye as foreign investors could ultimately lead to the involvement of a Turkish public entity at some point, it is encouraged that such commercial contracts still opt for the OIC-AC as the platform for dispute resolution.
Clarity in Dispute Resolution
The key clarity provided in the text of the Circular lies in its implication of the process for parties to opt into the OIC-AC framework. The Circular explicitly states that it is “sufficient for them [parties] to agree” that disputes shall be resolved via OIC-AC Rules with clear stipulation in their contracts. Such an approach would help reduce instances of pathological arbitration clauses which often result in protracted jurisdictional disputes in courts.
The Role of the Appointing Authority
While institutional arbitration is preferred, the Circular also addresses the possibility of designating the OIC-AC as an appointing authority for ad hoc arbitrations. Whether it is institutional or ad hoc arbitration, when the parties are unable to agree on a mediator or arbitrator, the Centre would step in to ensure the wheels of justice keep moving. The Arbitration Rules 2026 and Mediation Rules 2026 have relevant provisions to address such situations which are exclusively handled by the 21-member International Court of Arbitration.
Future-Proofing Clauses
Though the implementation of the Presidential Circular is to take immediate effect, it is pertinent for parties to ensure their clauses are future-proof. The OIC-AC has a multi-tier dispute resolution process, which is optional for parties who would like to explore mediation before arbitration. Additionally, in accordance with the principles of party autonomy, parties are free to choose their seat of arbitration, which can be any jurisdiction within and outside the OIC region, while Istanbul may be the ‘place of arbitration’. However, when parties fail to choose their seat of arbitration, Istanbul would be the default seat.
Accessibility and Transparency under the OIC-AC Arbitration Rules 2026
One of the major criticisms of emerging arbitration centres is the lack of relevant data which makes the “transparency gap” a key consideration for parties. To ensure trust is built and sustained, parties often require details on how rules are effectively applied which provides a clear idea of how such arbitral institutions operate. With its jurisdiction covering both commercial and investment disputes, the OIC-AC amended its Arbitration Rules 2023, which led to the approval of the new Arbitration Rules 2026, effective from January 1, 2026.
Under the new Arbitration Rules 2026, the OIC-AC introduced Appendix II on Transparency Rules as part of the new rules, which addresses the increasing call for transparency in investor-State arbitrations. The Transparency Rules incorporated into the new Arbitration Rules substantially adopt the UNCITRAL Rules on Transparency in treaty-based Investor-State Arbitration.
To ensure wider reach and promote accessibility, the OIC-AC had also issued the Arabic and French versions of both its Arbitration Rules 2026 and Mediation Rules 2026. Accessibility has also been enhanced through the centre’s smart collaboration with Jus Mundi to allow practitioners to access its rules instantly in a digital format.
Conclusion
The Presidential Circular 2026/3 is a landmark directive that repositions the OIC Arbitration Centre as a major regional and global forum for resolving investment and commercial disputes. By asking public and state-owned entities to utilize this specialized platform, President Erdoğan has effectively provided a unique bridge for 57 OIC member states to embrace a framework that reflects their cultural values with a blend of international best practices.
Turkish ministries, state-owned enterprises, and PPP projects are required to include the OIC-AC arbitration clauses in all contracts where the counterparty is based in any OIC member state. Accordingly, beyond commercial disputes, this circular provides a framework for cross-border investments.
The strategic repositioning of the OIC-AC confirms that Istanbul is no longer merely a gateway between East and West; it has evolved into a sophisticated legal hub where international best practices and regional expertise converge.
ABOUT THE AUTHOR
Dr. Umar A. Oseni is a dispute resolution expert and Fellow of the Chartered Institute of Arbitrators (FCIArb), currently serving as Secretary-General of the the Organisation of Islamic Cooperation (“OIC”) Arbitration Centre. Specializing in alternative dispute resolution (“ADR”), he has extensive experience in complex mediation and arbitration cases and trained with the Program of Negotiation at Harvard Law School. He previously served as CEO and General Counsel of the International Islamic Liquidity Management Corporation (“IILM”). Dr. Oseni holds advanced degrees in law and finance and is a published author on ADR, comparative law, and Islamic finance, contributing to the development of global dispute resolution practices.
*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.
