Arbitration In Türkiye – 2025 Year In Review

1. Introduction

1. 2025 was not a year of grand surprises in Türkiye-related arbitration. No treaty earthquake, no sudden doctrinal revolution, no dramatic shift in legislative architecture. But it was a year in which the law quietly did what it often does at its most consequential moments: it refined. Long-running disputes reached procedural and judicial inflection points; familiar concepts—jurisdiction, admissibility, consent, public policy—were tested again, but this time with slightly sharper edges. The result is a picture of Türkiye-related arbitration that feels increasingly mature: less defined by novelty, more defined by consolidation, calibration, and occasional retrenchment.
2. The investment arbitration landscape reflected this trend through active dockets, procedural experimentation under the 2022 ICSID Rules, and a continued prominence of post-award proceedings—particularly in disputes involving Libya under the Libya–Türkiye BIT. Commercial arbitration, meanwhile, was shaped less by headline cases than by a set of carefully reasoned court decisions that clarified what Turkish courts will support, what they will not, and—crucially—what they will require from tribunals and drafters if arbitration is to remain efficient and enforceable. Read together, the year's developments deliver a single recurring message: arbitration in Türkiye remains broadly supported, but it increasingly rewards precision.

2. Investment Treaty Arbitration

3. Investment arbitration involving Türkiye and Turkish investors remained active and diverse throughout 2025. The year proved significant not because it altered the treaty map, but because it brought important clarifications in the way tribunals and courts approach threshold questions: what qualifies as a protected investment; how temporal limits are policed; how expedited procedures and security-for-costs applications operate under the revised ICSID framework; and how far national courts will go—or refuse to go—when asked to revisit jurisdictional boundaries after the award.

2.1 Disputes and Arbitral Proceedings

4. One of the most closely watched arbitrations involving Türkiye as respondent in 2025 was ENCORE Investment Group Limited v. Republic of Türkiye, brought under the Malta–Türkiye BIT. The dispute arises from Encore's alleged indirect minority shareholding in Muradiye Elektrik Üretim A.Ş., a company operating a hydropower plant in a city located in eastern part of Türkiye, namely Van. . Encore contends that judicial and administrative measures taken by Turkish authorities—culminating in the confiscation of all shares and their transfer to state administration through the Savings Deposit Insurance Fund (SDIF) in 2023—amounted to unlawful expropriation and denial of justice.
5. After registration before the ICSID in late 2024, the case gained procedural momentum in 2025. The tribunal was constituted in May, with Gabrielle Kaufmann-Kohler as President alongside George Bermann and Juliet Blanch. Türkiye then sought early dismissal under ICSID Arbitration Rule 41, arguing that the claims were manifestly without legal merit. In its 7 October 2025 decision, the tribunal rejected the application in full. The reasoning was notable less for its destination than for its method: the tribunal underlined the high threshold built into Rule 41 and held that objections concerning the existence and timing of a protected investment, alleged abuse of process through restructuring, and the interpretation of treaty standards required fuller examination rather than summary disposal. In doing so, the tribunal signalled that expedited mechanisms remain available—but that their gatekeeping function will be exercised with restraint.
6. A different trajectory unfolded in Alamos Gold Holdings Coöperatief and Alamos Gold Holdings v. Republic of Türkiye, a high-value claim under the Netherlands–Türkiye BIT reportedly seeking damages around USD 1 billion. The dispute stems from Türkiye's refusal to renew permits linked to a large-scale silver and gold mining project. In 2025, the arbitration entered a commercially driven phase when Alamos announced an agreement to sell the relevant mining assets to Tümad Madencilik—reportedly affiliated with Nurol Holdings—for USD 470 million, payable over two years. The parties agreed to suspend the ICSID proceedings, with discontinuance with prejudice anticipated once contractual milestones are satisfied. Whatever may be learned in time about any unpublished procedural decisions, the public face of 2025 was clear: even in high-stakes treaty disputes, commercial resolution pathways can abruptly become the main solution.
7. Disputes linked to measures taken in the aftermath of the failed 2016 coup also resurfaced in 2025. In Akfel Commodities Holding and I-Systems Global v. Republic of Türkiye, brought under the Singapore–Türkiye and Netherlands–Türkiye BITs, an ICSID tribunal issued an award in July 2025. While the outcome is not publicly disclosed in the materials referenced, the case moved decisively into its post-award phase when Türkiye initiated annulment proceedings in December and an ICSID ad hoc committee was constituted. The dispute thus continues, but in a form that has become increasingly central to the Türkiye-related docket: the theatre of arbitration does not end at the award, and 2025 reinforced that reality.
8. On the claimant side, Turkish investors continued to pursue treaty claims abroad, especially in energy and construction. One of the most procedurally instructive cases of the year was Lotus Enerji v. Turkmenistan (2) under the Energy Charter Treaty. After constitution of the tribunal in January 2025 under Meg Kinnear, Turkmenistan sought security for costs under the 2022 ICSID Arbitration Rules. In April 2025, the tribunal ordered Lotus to post USD 2 million in security, applying the revised Rules' framework as a standalone basis and distancing itself from earlier ICSID approaches that had treated security as exceptional. That issue continued to shape the proceedings. In September, the tribunal examined the claimant's proposed form of security—an after-the-event insurance policy issued by a Turkish insurer—and found the documentation contained errors and did not clearly explain the mechanism's operation in practice. The claimant was directed to submit a revised and clarified policy, with the tribunal reserving final approval.
9. A contrasting outcome followed in Imeks İnşaat Makina Elektrik Konstrüksiyon v. Turkmenistan, another ICSID dispute brought under the Türkiye–Turkmenistan BIT and pending since 2021. In March 2025, a tribunal chaired by Christopher Greenwood rejected Turkmenistan's renewed request for security for costs, underscoring that even under harmonised rules, security determinations remain intensely fact-sensitive. Taken together, Lotus and Imeks offer a neatly balanced lesson from 2025: the revised Rules matter, but they do not flatten discretionary judgment.
10. Turkish investors were also present in disputes beyond energy and construction. In Kent Kart et al. v. Republic of Serbia, the claimants challenge the termination of a long-term contract for ticketing and vehicle-tracking systems used in Belgrade's public transport network. The arbitration, brought under the Türkiye–Yugoslavia BIT, progressed procedurally in 2025 with constitution of an ICSID tribunal in February; the claimants reportedly seek approximately USD 17 million in damages. Meanwhile, a much older story closed. In Sistem Mühendislik v. Kyrgyz Republic, a dispute dating back to a 2009 award rendered under the ICSID Additional Facility Rules, the claimant acknowledged in March 2025 that Kyrgyzstan had fully satisfied its settlement obligations, ending an enforcement saga that had spanned more than a decade.

2.2 Awards, Set-Aside, and Enforcement Proceedings

11. If one thread tied the year together, it was the continuing influence of national courts in shaping post-award outcomes. This was especially visible in the Libya–Türkiye BIT line of cases, where jurisdictional scope and temporal boundaries remained the decisive battleground.
12. In Etrak v. Libya, which concerns unpaid amounts owed for public construction works, enforcement efforts in the United States intensified. Following confirmation of the award by the US District Court for the District of Columbia in early 2025, the court ordered post-judgment discovery against Libyan assets in September, citing Libya's prolonged failure to comply with payment obligations. In December 2025, the same court authorised Etrak to proceed with attachment, finding that a reasonable period had elapsed since judgment and that Libya's conduct indicated attempts to evade enforcement.
13. French courts continued to play their familiar gatekeeping role in Libya-related jurisprudence. In February 2025, the Cour de cassation rejected Libya's attempts to overturn Paris Court of Appeal decisions in Cengiz v. Libya and Nurol v. Libya, endorsing a distinction between jurisdictional review and merits-based allegations such as illegality or corruption, and reaffirming the limited scope of review in set-aside proceedings.
14. The year's most striking turn, however, arrived at the end of 2025 in Ustay Yapı Taahhüt ve Ticaret v. Libya. The dispute originates from construction projects carried out during the 1990s and early 2000s. In a 2020 partial award, the tribunal declined jurisdiction under the OIC Agreement but upheld jurisdiction under the Libya–Türkiye BIT, reasoning that Libya's failure to comply with a 2013 Settlement Agreement generated a new dispute within the BIT's temporal scope. The Paris Court of Appeal endorsed that approach in January 2024, and the arbitration concluded with a final award in March 2024.
15. In its 17 December 2025 judgment, the Cour de cassation offered Libya a renewed opportunity by setting aside the Court of Appeal's ruling and remanding the case. The Supreme Court held that the appeal judges had circumvented the BIT's jurisdictional scope by treating the Settlement Agreement as producing a dispute autonomous from the underlying investment. The judgment sharpened the dilemma rather than softening it: either the dispute arises autonomously from the Settlement Agreement, in which case it does not arise “directly” out of investment activities within the meaning of the BIT; or it arises from the underlying construction contracts, in which case it falls outside the treaty's temporal reach. The decision aligns Ustay with the restrictive logic previously adopted in comparable Libya-related scenarios and stands as a clear marker of retrenchment: settlement arrangements cannot be used to re-engineer temporal jurisdiction where the treaty draws a firm line.

2.3 Emerging and Potential Disputes

16. Finally, while no arbitration had been formally initiated by the end of 2025, the controversy surrounding the gas transmission and storage agreement between Bulgaria's state-owned energy company and Türkiye's BOTAŞ drew attention as a potential future dispute. Signed in 2023 for thirteen years and reportedly providing access to Turkish LNG terminals and transmission capacity, the agreement came under political and commercial pressure following a change in government in Bulgaria. Public statements suggested substantial accumulated liabilities and an intention to renegotiate, accompanied by explicit acknowledgment that the dispute could escalate if talks failed. The agreement also attracted scrutiny in the EU context through competition-law lenses. Whether the matter ultimately matures into arbitration—and if so, in what forum—remains uncertain. But the episode reflected a trend that is becoming harder to ignore: the boundary between energy policy, state-owned enterprises, and arbitration risk is increasingly thin in Türkiye's regional economic relations.

3. Commercial Arbitration – Court Decisions

17. In 2025, Turkish courts continued to shape commercial arbitration not through sudden shifts, but through decisions that refined fundamentals: what counts as clear consent; how strictly arbitral jurisdiction will be confined to the clause's wording; how far public policy reaches at annulment and enforcement; and how tribunals must draft relief if awards are to be executable without confusion. The judicial posture remained broadly supportive of arbitration, but the support was conditional in a very specific way. Where parties and tribunals were disciplined—precise in language, coherent in remedies, careful in procedure—courts proved receptive. Where drafting was loose or relief was structurally problematic, the courts were willing to intervene, sometimes through the vocabulary of public policy, but in substance through the logic of enforceability and consent.

3.1 Limits of Arbitral Relief and Public Policy

18. A decision of the 6th Civil Chamber of the Court of Cassation (E. 2024/1700, K. 2025/1758, 29 April 2025) shows how public policy concerns can arise not from the merits, but from the architecture of the dispositive. The case concerned an objection-to-enforcement proceeding (itirazın iptali) referred to arbitration. The tribunal annulled the objection and ordered continuation of enforcement proceedings, but also went further and ordered direct collection of the principal debt and accrued interest.
19. The Court of Cassation annulled the award on the basis that the tribunal had exceeded its mandate in a way that created execution-stage ambiguity. In such proceedings, the tribunal may decide on annulment of the objection and continuation of the enforcement, and may rule on ancillary items such as enforcement indemnity, arbitral fees, costs, and attorneys' fees. But ordering direct collection of the underlying debt—alongside continuation of enforcement proceedings—generated overlapping routes of execution and therefore uncertainty. That uncertainty, the Court held, made the award not practically enforceable and thus contrary to public policy. The decision is a quiet but pointed reminder: in Turkish practice, an award can lose enforceability not because it is wrong, but because it is drafted in a way that cannot be executed cleanly.

3.2 Enforcement and Criminal Allegations: A Restrained Public Policy Review

20. One of the year's most significant pro-enforcement rulings came from the 11th Civil Chamber of the Court of Cassation (E. 2024/2560, K. 2025/2754, 22 April 2025) concerning enforcement of an ICC award seated in Paris. The first-instance court had refused enforcement on the basis that criminal investigations and prosecutions were ongoing in Türkiye against individuals involved in the arbitration, including allegations of false expert reports and perjured testimony.
21. The Court of Cassation reversed. It emphasised that the same allegations had already been raised and examined in the arbitration and in the set-aside proceedings before the Paris Court of Appeal, where annulment had been refused. In the absence of a final criminal conviction, the mere existence of criminal proceedings could not by itself render an award contrary to public policy. The Court went further and highlighted a systemic risk: if enforcement courts treated the pendency of criminal proceedings as sufficient, parties could neutralise arbitration agreements by initiating or relying on proceedings in the enforcement state, undermining the New York Convention structure. The tone of the decision was restrained, but its message was firm: public policy is not a back door to merits review, and criminal allegations do not become enforcement vetoes without final judicial findings.

3.3 Scope of Arbitration Clauses and Excess Damage Claim (Munzam Zarar)

22. The 3rd Civil Chamber of the Court of Cassation (E. 2024/1071, K. 2025/1519, 11 March 2025) delivered a decision with practical drafting consequences. The arbitration clause was narrowly phrased, confined to disputes “arising out of the contract.” Despite that wording, the claimant pursued an excess damage (munzam zarar) claim before the arbitral tribunal. The tribunal assumed jurisdiction and issued an award.
23. The Court of Cassation set the award aside for lack of jurisdiction. The reasoning turned not on hostility to excess damage (munzam zarar) claims, but on characterisation and clause scope. While the contract gave rise to the principal debt, excess damage (munzam zarar) was treated as an autonomous claim rooted not in the contract itself, but in the debtor's default and the unlawful delay in performance. Its legal basis therefore lay in statutory obligations under the Turkish Code of Obligations rather than in the contract's dispute universe as defined by the parties. Because the clause was drafted narrowly, the Court held it did not extend to excess damage (munzam Zarar). The decision is best understood as a drafting warning: in Turkish court review, the words of the arbitration agreement remain the first and last boundary line.

3.4 Multi-Tier Clauses and the Clarity of Arbitral Consent

24. Another decision (3rd Civil Chamber of the Court of Cassation E. 2025/225, K. 2025/2164, 15 April 2025) addressed a clause providing that disputes would first go to mediation and, if unresolved, proceed to arbitration. The dispute arose under an attorney engagement agreement. What made the case distinctive was the nature of the “mediation” referenced: it was framed in the vocabulary of Türkiye's mandatory mediation regime, which operates as a precondition to litigation in certain categories of disputes.
25. The Court concluded that arbitral consent was not expressed with the clarity required for validity. Importantly, the court's concern was not that multi-tier clauses are inherently problematic. The concern was that by referencing mandatory mediation—a procedural gateway associated with court proceedings—the clause blurred whether arbitration was genuinely intended as the final forum, or whether the parties had inadvertently built a litigation-oriented sequence into the clause. The decision's practical lesson is narrow but significant: multi-tier design is acceptable, but when drafting in the shadow of mandatory mediation, parties should avoid language that pulls arbitration into the orbit of court preconditions and thereby introduces uncertainty.

3.5 Enforcement of Russian Awards in a Geopolitical Context

26. In many jurisdictions, awards and judgments originating from the Russian Federation have faced heightened scrutiny in recent years due to sanctions regimes and geopolitical considerations arising from the Russia–Ukraine war. That external layer is not present in Türkiye, which does not apply sanctions against Russia. The result is that Russian-origin awards and judgments are assessed under the ordinary framework of Turkish law and the New York Convention, without an added sanctions-driven filter.
27. This context framed the decision of the Sakarya Regional Court of Appeal (7th Civil Chamber, E. 2025/495, K. 2025/1295, 8 July 2025) enforcing an award of the International Commercial Arbitration Court of the Russian Chamber of Commerce and Industry. The respondent resisted enforcement on grounds including impaired defence rights due to the war, improper service, and public policy. The court rejected these objections. The record showed that the respondent had been duly notified at each stage, had submitted written defences, and had chosen not to attend hearings. Applying Article V of the New York Convention, the court found no proven basis for refusal and confirmed enforcement, while adjusting proportional fees on public policy grounds. The broader implication is straightforward: for parties seeking enforcement of Russian-origin awards, Türkiye continues to present a comparatively predictable venue precisely because it does not superimpose sanctions politics onto enforcement analysis.

4. Concluding Observations

28. The 2025 case law confirms that Turkish courts remain broadly arbitration-supportive, but their support increasingly operates through a discipline of precision. Public policy continues to function as a narrow safeguard rather than a broad review tool, yet courts are attentive to whether arbitral relief is executable without overlap, and whether arbitral consent is expressed with clean, unambiguous language. For practitioners, the lesson of the year is not dramatic, but it is operationally decisive: stable foundations exist, but arbitration in Türkiye rewards careful drafting, coherent tribunal reasoning, and awards written with enforceability in mind.

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