their respective societies. The Istanbul Arbitration Center is designed to act as the same force by promoting the effective operation of arbitration and other dispute resolution mechanisms. Eventually the working group prepared the Draft Law of Istanbul Arbitration Center (The Draft Law). It was sent to the Turkish Grand National Assembly on March 25, 2013. It is still being reviewed by a commission in the Assembly.   

According to the Draft Law, the Center would consist of a General Assembly, a Board of Directors, Auditor, an Advisory Board, National and International Courts of Arbitration and Secretary General. To provide broad representation, in the Draft Law provides that the make up of General Assembly would include members from the Union of Chambers and Commodity Exchanges of Turkey (TOBB), the Banks Association of Turkey, Capital Markets Board of Turkey (SPK), Union of Turkish Bar Associations, and the Banking Regulation and Supervision Agency (BDDK).

The Draft Law regulates only the organization of the Istanbul Arbitration Center and does not include any substantive provisions on arbitration and other dispute resolutions methods. The Board of Directors of the Center would determine the rules on arbitration and other alternative dispute resolution methods. After review of the rules by the Advisory Board of the Center, the Board of Directors would submit the rules proposal for approval by the General Assembly of the Center.

The Center would be responsible for determining and announcing the rules regarding arbitration and alternative dispute resolution methods, and provide for the establishment of services about those and to promote alternative dispute resolution methods. The Center would have an independent legal personality subject to private laws. The Center would provide alternative dispute resolution services for disputing parties, including foreign parties. The Center would be competent by the consent of the parties whether or not the dispute is domestic or international.

There are some concerns about the Istanbul Arbitration Center with respect to its creation by statute instead of through private initiative. Critics argue that this situation may cause problems relating to the independence of the Center. But prominent Turkish scholars have noted that it is difficult to argue that the Center’s independence should be undermined because of its establishment based on a statute. The key issue relating to its independence and impartiality is how much the executive branch of the government would take part in its formation and functioning. Considering that the Ministry of Justice, SPK and BDDK are the part of the executive branch that would have members in the General Assembly, which is only three out of the total number of 23 members of the Assembly, such criticism is unfounded.

Thanks to the law reforms, the Turkish legal system is more arbitral friendly today. The Draft Law shows Turkey’s arbitral-friendly approach one more time. If we set aside the current and potential criticism about the Draft Law, founding an arbitration center in Istanbul is an important initiative not only in terms of the Turkish alternative dispute resolution culture but also reaching the goal of the IFC Project which aims to establish Istanbul as a global financial center. The Center will provide a definite opportunity to attract international trade, which will benefit not only Turkey but other countries around the world.