Resolving Commercial Contract Disputes in Türkiye: Litigation, Mediation and Arbitration

If your company has a commercial contract dispute connected to Türkiye, you have three main routes to a binding outcome: court litigation before the commercial courts, mediation, and arbitration. For monetary commercial claims, Turkish law also requires you to attempt mediation before you can file in court. This guide explains each route in plain terms, why foreign businesses often choose arbitration, and how the result is finally enforced.

The first question: where does your dispute go?

When a commercial contract goes wrong in Türkiye, your starting point is to identify the correct forum. Three routes lead to a binding result:

• Litigation — a lawsuit before the Turkish courts, ending in a judgment.
• Mediation (arabuluculuk) — a structured, confidential negotiation led by a neutral mediator, ending in a settlement document.
• Arbitration (tahkim) — a private dispute-resolution process before one or more arbitrators you help choose, ending in an arbitral award.

Which routes are open to you depends on what your contract says and on the nature of the claim. If your contract contains a valid arbitration clause, that clause normally directs the dispute away from the courts and into arbitration. If it does not, your dispute belongs in court — but for money claims you will usually have to try mediation first. We explain each step below.

Litigation: the commercial courts (asliye ticaret mahkemesi)

Most commercial contract claims that go to court in Türkiye are heard by the commercial court of first instance — the asliye ticaret mahkemesi. This is a specialised civil court that deals with disputes between merchants and companies, such as unpaid invoices, breach of a supply or distribution agreement, shareholder and company matters, and similar commercial claims.

The court applies Turkish substantive law — principally the Turkish Commercial Code (Türk Ticaret Kanunu No. 6102) and the Turkish Code of Obligations (Türk Borçlar Kanunu No. 6098) — and follows the procedure set out in the Code of Civil Procedure (Hukuk Muhakemeleri Kanunu No. 6100, often shortened to HMKHMKCode of Civil Procedure No. 6100The rulebook for how a civil case actually runs in Türkiye — which court, which steps, which deadlines, and what evidence counts.Glossary →). Where a foreign element is involved — a foreign party, a foreign-law contract, or assets abroad — the court also looks to the International Private and Procedural Law Act (Milletlerarası Özel Hukuk ve Usul Hukuku Hakkında Kanun No. 5718, known as MÖHUKMÖHUKTurkish Private International Law Act No. 5718The Turkish statute that decides which country's law applies to a cross-border matter, and how foreign judgments are recognised and enforced here.Glossary →) to decide which country's law governs and whether the Turkish courts have jurisdiction.

How a court case is structured

A commercial lawsuit generally moves through written pleadings (the statement of claim and the defence, followed by replies), an examination phase where evidence and expert reports are reviewed, hearings, and judgment. Many commercial cases turn on documents and on court-appointed expert (bilirkişiBilirkişiCourt-appointed expertAn independent expert appointed by the court to report on a technical question the judge is not expected to decide alone.Glossary →) reports rather than live witness testimony.

A first-instance judgment can usually be challenged on appeal to the regional court of appeal (bölge adliye mahkemesi) and, in defined cases, to the Court of Cassation (Yargıtay). Appeals add time, so the prospect of further review is something to weigh when you choose your strategy.

Mandatory commercial mediation before you can sue

For a large category of commercial claims, you cannot simply walk into court. Turkish law makes mediation a precondition to litigation (dava şartı arabuluculukArabuluculukMediationA structured negotiation before a registered mediator which, for several categories of dispute, must be attempted before a court case can be filed.Glossary →) for commercial claims whose subject is the payment of a sum of money — a receivable or compensation.

What mandatory mediation involves

You (or your lawyer) apply to a mediation office, a mediator is assigned, and the parties are invited to meet — in person or remotely — to try to settle. Mediation is confidential: what is said in the sessions cannot generally be used later in court. The process is designed to be fast, and it ends in one of two ways:

• Agreement. The parties sign a settlement document. A settlement reached through mediation can carry the force of an enforceable instrument, meaning you can take it to enforcement if the other side does not honour it.
• No agreement. The mediator issues a final report recording that the parties could not settle. That report is what unlocks your right to file the lawsuit in the commercial court.

Mediation is also available voluntarily for disputes that do not fall under the mandatory rule, including many cross-border commercial matters, whenever both sides are open to it.

Arbitration: domestic and international

Arbitration is a private alternative to the courts. Instead of a state judge, your dispute is decided by one or more arbitrators chosen under rules the parties agree on, and the result — the arbitral award — is binding. Arbitration is only available if the parties have agreed to it, normally through an arbitration clause in the contract or a separate arbitration agreement.

The seat of arbitration

A central concept is the seat of arbitration (the legal place of the arbitration). The seat is not just where hearings happen; it determines which procedural law governs the arbitration and which country's courts supervise it — for example, hearing any challenge to the award. Choosing the seat is therefore one of the most important decisions in an arbitration clause.

Which arbitration law applies

• Domestic arbitration — where the dispute has no foreign element and the seat is in Türkiye, the arbitration provisions of the Code of Civil Procedure (HMK No. 6100) apply.
• International arbitration — where there is a foreign element (for example a foreign party or cross-border performance) and the seat is in Türkiye, the International Arbitration Law (Milletlerarası Tahkim Kanunu No. 4686) applies. This law is built around internationally recognised arbitration principles, which is part of why foreign businesses find it familiar.

ISTAC and institutional arbitration

Parties can run an arbitration on their own (ad hoc) or under the rules of an arbitral institution that administers the case. In Türkiye, the Istanbul Arbitration Centre (ISTAC) is a commonly used institution offering a modern rule set and an Istanbul seat. International institutions such as the ICC are also frequently chosen for cross-border contracts. The institution and its rules are usually named in the arbitration clause.

Why foreign businesses often prefer arbitration

For a company based outside Türkiye, arbitration can offer practical advantages over local court litigation. None of these is a guarantee of success — but they explain why arbitration clauses are so common in cross-border contracts.

• Neutrality. A neutral seat and party-appointed arbitrators can feel more balanced than litigating in the other side's home courts.
• Choice of arbitrators. You can help select decision-makers with relevant commercial or industry experience.
• Language. The arbitration can be conducted in English (or another agreed language), reducing reliance on translation.
• Confidentiality. Arbitration is generally private, which can protect commercially sensitive information and relationships.
• Cross-border enforcement. An arbitral award is often easier to enforce internationally than a national court judgment, thanks to the New York Convention discussed below.
• Finality. Awards are not subject to the same multi-tier appeal process as court judgments; they can usually only be challenged on limited grounds (a set-aside action).

Enforcing the outcome

Winning is only half the battle — the result has to be turned into something you can collect. The enforcement path depends on which route produced your outcome.

Court judgments

A final Turkish court judgment for a sum of money can be pursued through the Turkish enforcement (icra) system against the debtor's assets. A foreign court judgment is different: before it can be enforced in Türkiye it must first be recognised and enforced (tanımaTanımaRecognition of a foreign judgment in TürkiyeThe court decision that makes a foreign judgment legally effective in Türkiye as proof — without, by itself, making it enforceable.Glossary → ve tenfizTenfizEnforcement of a foreign judgment in TürkiyeThe Turkish court decision that makes a foreign judgment enforceable in Türkiye — the step that lets you actually collect.Glossary →) through a Turkish court, under the rules of MÖHUK (No. 5718), which checks conditions such as reciprocity and consistency with Turkish public order.

Mediation settlements

A settlement reached in mediation can be given enforceable force, so that if the other party fails to pay, you can move to enforcement rather than starting a fresh lawsuit. This is one of mediation's most useful features.

Arbitral awards

A domestic award rendered under the HMK or an international award seated in Türkiye under Law No. 4686 is enforced through the Turkish courts and then the enforcement system. A foreign arbitral award is enforced under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958), to which Türkiye is a party. The Convention sets out a limited list of grounds on which enforcement may be refused, which is precisely why a cross-border award is often more readily enforceable than a foreign court judgment.

Choosing the right route for your dispute

There is no single best answer — the right route depends on your contract, the amount at stake, where the other party's assets sit, and how important speed and confidentiality are to you. A few practical pointers:

• If your contract has a valid arbitration clause, arbitration will usually be your path, and litigation in court may be off the table.
• If you are bringing a monetary commercial claim in court, plan for mandatory mediation first — build the time and preparation into your strategy.
• If you are still negotiating the contract, this is the moment to choose your forum, seat, governing law and language deliberately, rather than leaving it to chance.
• Always map out enforcement early, especially where assets or parties are spread across more than one country.

Because the procedural rules, deadlines and forum questions can be unforgiving, it is wise to get tailored advice on your specific contract and facts before you commit to a route. Our team advises foreign companies on commercial disputes connected to Türkiye, from reviewing your dispute-resolution clause to representing you in mediation, court or arbitration and through to enforcement.

Frequently asked questions