As Turkey continues to play a pivotal role in regional trade and investment, foreign companies increasingly find themselves engaged in commercial relationships governed by Turkish law. With this growth, disputes are also inevitable—making it essential for foreign investors and business partners to understand the legal framework for resolving commercial disputes in Turkey.

This article provides a practical overview of commercial law disputes under Turkish law, with a particular focus on issues relevant to foreign claimants.

1. Understanding What Constitutes a Commercial Dispute under Turkish Law

Commercial disputes in Turkey are primarily governed by the Turkish Commercial Code No. 6102 (TCC) and the Turkish Code of Civil Procedure No. 6100 (CCP). According to Article 4 of the TCC, a dispute is classified as “commercial” if:

It arises from a transaction or relationship involving merchants;

It relates to business activities that are commercial by nature (e.g., agency, transport, banking, insurance, construction);

It is expressly deemed commercial by law;

It involves at least one party considered a merchant and the subject matter concerns their commercial enterprise.

This classification has important procedural consequences, particularly in relation to court jurisdiction and the application of certain evidentiary rules.

2. Jurisdiction and Court System in Turkey

Commercial disputes are primarily handled by:

Commercial Courts of First Instance in jurisdictions where they are established;

Civil Courts of First Instance acting in their place where no dedicated commercial court exists.

For foreign claimants, jurisdiction clauses in contracts are vital. Turkish courts generally respect the parties’ choice of forum, provided it does not violate mandatory Turkish procedural rules or public policy. For example:

If the dispute concerns immovable property, Turkish courts will likely retain exclusive jurisdiction.

For contractual disputes, forum selection clauses and arbitration agreements are generally enforceable under Turkish law.

3. Mandatory Mediation in Commercial Disputes

A key procedural element foreign claimants must be aware of is the mandatory mediation requirement, introduced by Law No. 7155 in 2019.

If a dispute involves a monetary claim arising from a commercial relationship, the claimant is required to initiate mediation proceedings before filing a lawsuit. This applies even when one party is foreign, so long as the dispute is to be adjudicated in Turkish courts.

The mediation process must be completed within 6 weeks.

If mediation fails, the mediator issues a final report allowing the claimant to proceed with litigation.

Skipping this step results in dismissal of the lawsuit on procedural grounds.

4. Evidence and Burden of Proof

Turkish civil procedure places significant emphasis on written evidence. Oral testimony has limited evidentiary weight unless supported by documents. In commercial disputes, claimants should prepare to submit:

• Signed contracts
• Invoices, delivery receipts, bank receipts
• Correspondence, purchase orders
• Corporate records and meeting resolutions
• Books and commercial ledgers (especially if certified by Turkish authorities)

Foreign claimants should also note that Turkish law does not permit extensive pre-trial discovery as in common law systems. Instead, each party must present its own evidence, and the court may order document production only in limited circumstances.

5. Alternative Dispute Resolution: Arbitration and Enforcement

For foreign investors, arbitration offers an effective alternative to Turkish courts, especially in high-value or complex international disputes. Turkey is a party to:

• The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards
• The ICSID Convention for investment disputes

Arbitration clauses are enforceable under Turkish law, provided:

• The dispute is arbitrable (e.g., not related to certain public law matters),
• The agreement is in writing, and
• It complies with the formal requirements under Law No. 4686 (for international arbitration) or the CCP (for domestic arbitration).

Istanbul Arbitration Centre (ISTAC) is an increasingly popular choice for commercial arbitration in Turkey.

6. Recognition and Enforcement of Foreign Judgments and Awards

a) Foreign Court Judgments

Enforcing a foreign court decision in Turkey requires an exequatur (recognition) decision under Private International Law and Procedural Law No. 5718. The main conditions include:

• Reciprocity (between Turkey and the originating state)
• Finality of the judgment
• No conflict with Turkish public order
• Proper service of process to the defendant

b) Foreign Arbitral Awards

Arbitral awards from New York Convention countries are enforceable in Turkey, with fewer requirements than court decisions. Turkish courts can only refuse enforcement on specific grounds such as:

• Procedural irregularities
• Violation of public policy
• Invalid arbitration agreement

7. Time Limits and Statutes of Limitation

Under Turkish law:

The general statute of limitations for commercial claims is 10 years.

However, shorter limitation periods apply for specific types of contracts (e.g., transport, agency, insurance).

The statute may be interrupted or suspended under certain conditions (e.g., mediation, settlement negotiations, partial payment).

Foreign claimants are advised to monitor timelines closely and initiate legal action promptly, especially in disputes involving perishable evidence or claims for damages.

Conclusion

Commercial disputes in Turkey are governed by a well-established legal system that incorporates both civil law traditions and modern commercial principles. However, procedural nuances—such as mandatory mediation, evidence rules, and enforcement barriers—require careful navigation, particularly for foreign claimants unfamiliar with local practice.

By anticipating these issues and partnering with experienced local counsel, foreign businesses can protect their rights, enforce contracts, and pursue claims effectively under Turkish law.