The Turkish Public Procurement Authority recently amended the standard contracts annexed to the Regulations on the Implementation of Public Procurements effective as of 19 January 2018.
What do the amendments say?
Instead of referring to Turkish courts, public administrations may choose arbitration for disputes arising out of the execution of a procurement agreement. The Istanbul Arbitration Centre (ISTAC) will conduct domestic arbitrations; for international arbitrations, public administrations can choose between ad hoc arbitration wherein the Turkish International Arbitration Law No. 4686 is applied and ISTAC arbitration.
The Office of the Prime Minister issued a circular on 19 November 2016 (Circular No. 2016/25) inviting Turkish public authorities to consider inserting ISTAC arbitration clauses into their national and international contracts. The Turkish Public Procurement Authority’s recent amendments to the standard contracts demonstrate the Turkish public authorities’ rising arbitration awareness. ISTAC is now being routinely added to private and public sector contracts, ostensibly demonstrating public authorities’ recognition that ISTAC arbitration is a more efficient and faster option to dispute resolution compared to local court proceedings.