In short: A commercial dispute in Türkiye should not automatically lead to a lawsuit. The right strategy depends on the contract, evidence, dispute resolution clause, limitation periods, counterparty assets and the route from a decision to actual recovery.
Why it matters: A foreign company may win a claim but still face mediation requirements, security for costs, a separate recognition process or an asset-recovery problem. Forum, procedure, cost and enforcement should be assessed together from the start.
For a foreign company, the first questions are practical: where can the dispute legally be brought, is mediation required, how long may the process take, what will it cost, where are the counterparty's assets, and can a judgment or award actually be enforced in Türkiye?
This guide provides a practical roadmap for foreign companies involved in disputes with Turkish companies or relating to business activities in Türkiye. It is designed to help decision-makers organise the early assessment before a formal demand, mediation, court filing or arbitration.
Executive Summary: Three Rules Foreign Companies Should Know
1. The dispute resolution clause can determine the entire strategy
A valid arbitration agreement or jurisdiction clause can decide where the dispute must be resolved. Turkish courts generally respect clear and valid arbitration agreements. If court proceedings are started despite a valid arbitration clause and the defendant raises the arbitration objection in time, the court may dismiss the action without examining the merits.
Practical risk: Do not assume that a reference to courts, arbitration or a foreign jurisdiction works simply because it appears in the contract. Wording, scope, validity and procedural timing should be reviewed before proceedings begin.
2. Winning the case is not the same as recovering the money
Before investing heavily in litigation or arbitration, the creditor should identify where the debtor's assets are located. A successful judgment has limited commercial value if the defendant has no attachable assets when enforcement begins. Where there is a genuine risk of dissipation, an interim attachment or injunction may need to be considered at an early stage, subject to the applicable legal requirements.
3. Foreign companies face additional procedural questions
A foreign claimant litigating in Türkiye may be required to provide security for costs, known as cautio judicatum solvi, unless a treaty, reciprocity or another exemption applies. Covered commercial litigation may also require mandatory mediation before the lawsuit can be filed. These issues affect both timing and the initial cash requirement.
Before Taking Action: Five Questions to Answer
Before sending a formal demand, commencing mediation or filing proceedings, a foreign company should usually establish:
- What does the contract say about governing law and dispute resolution?
- What claims are available and when do the relevant limitation periods expire?
- What evidence exists and where is it located?
- Where are the counterparty's assets?
- Which route provides the best balance between time, cost and enforceability?
These questions may produce a very different strategy from simply filing a claim in the first available court.
1. Preventive Measures Before a Dispute Arises
Jurisdiction, Governing Law and Arbitration Clauses Matter
Many international commercial disputes become more expensive because the dispute resolution clause was treated as boilerplate when the contract was signed. Governing law, jurisdiction and arbitration should be reviewed as connected but separate decisions.
Governing law
A contract involving a Turkish company does not necessarily need to be governed by Turkish law simply because one party is Turkish. A choice of foreign law does not automatically exclude every mandatory Turkish rule that may become relevant, however. The governing law clause should therefore be considered together with the dispute resolution and enforcement strategy.
Jurisdiction
Foreign parties may, subject to applicable legal requirements and limitations, agree that disputes will be heard before a foreign court. The clause needs to be legally effective. A vague clause such as “The courts of England may have jurisdiction” can create very different consequences from “The courts of England shall have exclusive jurisdiction.” Turkish procedural objections regarding jurisdiction or arbitration must also be raised correctly and within the applicable timeframe.
Arbitration
If arbitration is intended, the agreement should clearly identify the parties' intention to arbitrate and normally address the arbitral institution, seat, number of arbitrators, language, governing law and scope of disputes. Clear consent and written form are fundamental issues. A clause that refers inconsistently to both courts and arbitration can create a jurisdictional dispute before the underlying disagreement is examined.
Common mistake: copying a dispute clause
A clause copied from another agreement may not fit the transaction. A EUR 150,000 unpaid invoice does not necessarily require the same mechanism as a EUR 30 million construction or M&A dispute. The mechanism should reflect contract value, likely dispute value, asset location, confidentiality, technical complexity, enforcement geography and bargaining position.
2. Mandatory Mediation in Turkish Commercial Disputes
Is mediation mandatory before filing a commercial claim in Türkiye?
For certain commercial disputes brought before Turkish courts, yes. Under the current Turkish Commercial Code framework, mandatory mediation applies to specified commercial actions involving monetary claims, including receivables and compensation claims and certain actions concerning objection proceedings, negative declarations and restitution.
Foreign nationality does not by itself create an exemption. If a foreign company wishes to bring a covered commercial claim before a Turkish court, the requirement generally applies in the same way as it does to a Turkish company.
How long does mandatory commercial mediation take?
The statutory period is six weeks, with a possible extension of up to two additional weeks where necessary. A straightforward mediation may conclude earlier if the parties are organised and their decision-makers participate.
Does the foreign company need to travel to Türkiye?
Not necessarily in every case. Commercial mediation can often be organised through representatives and remote communication methods where procedurally appropriate. The more important question is whether the person attending has sufficient authority to negotiate and settle. A representative without a defined settlement mandate can turn mediation into a formality rather than a meaningful opportunity.
How much does mediation cost?
Mandatory mediation is generally much less expensive than full litigation. The mediator's remuneration is governed by the applicable annual tariff; the 2026 Minimum Mediation Fee Tariff entered into force on 1 January 2026. The ultimate cost depends on the dispute, time spent and whether settlement is reached. Legal representation is a separate cost.
Why foreign companies should take mediation seriously
Mandatory mediation should not be treated only as a box to check before litigation. A well-prepared mediation can test the counterparty's real defence, willingness and ability to pay, whether instalments or security could resolve the matter, whether the commercial relationship can be preserved and whether litigation costs can be avoided.
According to the Turkish Ministry of Justice, 253,064 commercial mediation files were completed in 2025 and 60,492 resulted in settlement.
Important exception
Recognition and enforcement proceedings concerning foreign judgments or foreign arbitral awards are different from a fresh monetary claim. Turkish decisions reviewed for this guide have held that mandatory mediation is not a prerequisite for recognition and enforcement proceedings because those proceedings do not involve a fresh examination of the underlying substantive dispute. The position should still be checked for the specific proceeding.
3. Commercial Litigation Before Turkish Courts
Which court handles a commercial dispute?
Many business disputes are heard at first instance by the Commercial Courts of First Instance, known as Asliye Ticaret Mahkemeleri. The fact that one or both parties are companies does not automatically mean that every dispute belongs before a Commercial Court. The legal nature of the dispute must be assessed first. Filing before the wrong court can lead to a competence decision before the merits are considered.
What does a typical commercial case involve?
Depending on the dispute, litigation may include written pleadings, preliminary procedural review, documents, witness evidence, expert examination, hearings, interim measures, judgment, appeal to the Regional Court of Appeal and, where legally available, further appeal to the Court of Cassation.
International disputes may require translations, notarised documents, apostilles or legalisation, foreign corporate documents, foreign-law opinions and cross-border service. These requirements should be included in the case budget and timetable.
How long does commercial litigation in Türkiye take?
There is no reliable single duration for every commercial dispute. Complexity, court workload, expert evidence, service issues and appeals can materially change the timetable. Recent Istanbul Courthouse statistics show different commercial claim categories averaging approximately 332 to 763 days at first instance, with some categories taking longer.
For a document-heavy, technical or high-value cross-border dispute, it is safer to plan in years rather than months if the case proceeds through full litigation and appeals. A practical budget should distinguish first-instance proceedings from the total enforcement timeline after appeals.
Why expert evidence can change the timeline
Commercial courts may rely on court-appointed experts where the dispute involves accounting, complex calculations, construction, machinery, technical performance, company valuation, financial records or sector-specific issues. Reports may be challenged and additional reports ordered, making expert evidence a major driver of duration and cost.
What Does Commercial Litigation Cost in Türkiye?
Court litigation does not have one fixed price. Cost categories may include court filing and judgment fees, advance expenses, experts, translations, service, notarisation and apostille, interim-measure security, foreign-plaintiff security, appeal fees and legal fees.
For monetary litigation, court fees can be linked to claim value. Under the 2026 judicial fee tariff, the proportional judgment fee for value-based claims is listed at 6.831% of the value awarded, subject to the detailed rules governing collection and payment. This percentage is not the total cost of the dispute; experts, translations, counsel and enforcement are separate.
Foreign plaintiff security: cautio judicatum solvi
Under Article 48 of Türkiye's Private International Law Act, a foreign individual or foreign legal entity commencing proceedings or enforcement in Türkiye may be required to provide security for potential costs and damages. Exemptions may apply based on international treaties, reciprocity or the particular legal position of the claimant's home state.
This requirement can tie up funds during proceedings. A foreign company should determine before filing whether an exemption is likely to apply and, if not, what security may be required. It should not be assumed either that every foreign company must provide security or that every foreign company is automatically exempt.
4. Arbitration as an Alternative to Turkish Court Litigation
For international commercial agreements, arbitration can provide an alternative to state court litigation. Two institutions frequently considered in Türkiye-related transactions are ISTAC, the Istanbul Arbitration Centre, and ICC, the International Chamber of Commerce. Arbitration is not automatically superior to litigation; the right choice depends on the dispute.
When can arbitration be attractive?
Arbitration may offer a neutral forum, English-language proceedings, arbitrators with sector expertise, procedural flexibility, confidentiality, a defined institutional procedure and easier cross-border enforcement. For construction, energy, manufacturing, technology or M&A disputes, these factors can be commercially important.
ISTAC arbitration
ISTAC is based in Istanbul and administers domestic and international disputes. It offers ordinary arbitration, fast-track arbitration, emergency arbitrator procedures and institutional case administration. Its current published fast-track framework applies to disputes up to TRY 5 million and aims for a final award within three months under that procedure.
For Türkiye-centred disputes, ISTAC may be attractive where the parties want institutional arbitration while keeping the seat, hearings and legal infrastructure close to the Turkish transaction.
ICC arbitration
ICC arbitration is widely used in major cross-border contracts and can suit transactions extending across several jurisdictions. The 2026 ICC Arbitration Rules entered into force on 1 June 2026. Under the current scale, the ICC filing fee is USD 5,000, and parties are generally required to fund an advance on arbitration costs; administrative and arbitrator fees are calculated using ICC's published scales.
Arbitration is not always cheaper
Institutional arbitration may cost more than Turkish court litigation for a relatively small unpaid invoice. For a multi-million-euro international project dispute, the additional cost may nevertheless be justified by specialised decision-makers, procedural control, language flexibility, confidentiality and international enforceability. The mechanism should be proportionate to the transaction.
Turkish Courts vs Arbitration: Practical Comparison
| Issue | Turkish Commercial Courts | ISTAC / International Arbitration |
|---|---|---|
| Decision-maker | Professional judge | Sole arbitrator or arbitral tribunal |
| Language | Turkish | Can be agreed by the parties |
| Confidentiality | Proceedings are generally not designed as private commercial proceedings | Greater procedural privacy can generally be achieved |
| Technical expertise | The court may appoint experts | Parties can select arbitrators with relevant experience |
| Appeal structure | Appeal and, where available, cassation | Limited challenge or setting-aside grounds |
| Upfront institutional costs | Generally lower | Can be significantly higher |
| Cross-border enforcement | Depends on foreign judgment enforcement rules | The New York Convention may provide a major advantage |
| Speed | Depends heavily on court and case | Can be more predictable, particularly in expedited procedures |
| Interim measures | Available through courts where legal conditions are met | Arbitration and court-based interim mechanisms may be available depending on the framework |
Common mistake: choosing three arbitrators for every dispute
Three arbitrators can be appropriate for high-value or complex disputes, but they materially increase cost. For a lower-value commercial contract, a well-drafted clause providing for a sole arbitrator may be more proportionate.
5. Recognition and Enforcement in Türkiye
A foreign company may already have a foreign court judgment or an arbitral award rendered outside Türkiye. That does not necessarily mean Turkish enforcement offices can immediately seize the debtor's assets. The enforcement route must first be identified.
Foreign Court Judgments and Foreign Arbitral Awards Are Different
Foreign court judgment
Recognition and enforcement of a foreign court judgment in Türkiye is primarily governed by Türkiye's Private International Law Act together with any applicable treaty. The Turkish court considers the statutory recognition and enforcement requirements.
Foreign arbitral award
Foreign arbitral awards may fall within the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, where the Convention applies. Türkiye has been a contracting state since 1992 and applies the Convention subject to reciprocity and commercial reservations. The Convention applies to arbitral awards, not ordinary foreign court judgments.
What Is the Difference Between Recognition and Enforcement?
Recognition means that a foreign decision is accepted as having legal effect in Türkiye. Enforcement means that the decision can be used to pursue compulsory execution against assets in Türkiye. Where a monetary award needs to be collected from a Turkish debtor, enforcement is generally the commercially important objective.
Will a Turkish Court Rehear the Entire Arbitration?
Generally, no. An enforcement court does not act as a new appellate tribunal deciding whether the arbitrator reached the correct commercial conclusion. Under the New York Convention and the relevant Turkish framework, the court examines recognition and enforcement requirements and possible refusal grounds rather than retrying the merits.
But enforcement is not automatic
Enforcement may still be challenged on grounds relating to the validity of the arbitration agreement, proper notice and due process, scope, tribunal composition or procedure, whether the award is binding, arbitrability and Turkish public policy. Proper documentation is also important; required arbitration documents or evidence of binding status must be submitted in the required form.
The Most Important Enforcement Question: Where Are the Assets?
A company deciding whether to litigate in London, arbitrate in Paris or sue in Istanbul should not analyse jurisdiction in isolation. It should ask where the result will be enforced. If the Turkish counterparty's main assets are in Türkiye, enforcement should be considered when the dispute clause is drafted and again when the dispute begins.
Relevant assets may include Turkish bank accounts, real estate, machinery, shares, receivables, vehicles, inventory and other attachable property. A favourable decision without an asset strategy can leave the creditor with an enforceable legal right but no practical recovery.
Commercial Dispute Strategy: What Foreign Companies Often Get Wrong
Mistake 1: Starting litigation before reviewing the contract
The jurisdiction or arbitration clause may change the entire route.
Mistake 2: Focusing only on whether the claim is legally strong
A strong claim against an insolvent or asset-light debtor may still be a poor litigation investment.
Mistake 3: Waiting until the end to investigate assets
The debtor's asset position may change during a multi-year dispute.
Mistake 4: Treating mandatory mediation as a formality
It may be the cheapest opportunity to obtain payment, security or a commercially workable settlement.
Mistake 5: Assuming a foreign judgment can immediately be enforced in Türkiye
Foreign judgments generally require recognition or enforcement analysis before Turkish compulsory enforcement can proceed.
Mistake 6: Assuming arbitration is always faster and cheaper
Arbitration can be effective, but its cost must be proportionate to the value and complexity of the transaction.
Mistake 7: Ignoring security for costs
Foreign-claimant security should be checked before proceedings begin, particularly where a large monetary claim is contemplated.
Mistake 8: Failing to preserve evidence early
Emails, delivery records, invoices, inspection reports, WhatsApp messages, technical data and accounting records may be decisive. Evidence that disappears during negotiations can be difficult to reconstruct.
Practical Roadmap for a Foreign Company Facing a Dispute in Türkiye
A sensible dispute assessment will usually follow this order:
- Contract review: Identify governing law, jurisdiction, arbitration, notice requirements, limitation clauses and contractual preconditions.
- Claim and evidence review: Determine the legal claim, available evidence, potential counterclaims and limitation periods.
- Asset review: Determine whether the defendant has assets in Türkiye or elsewhere and whether urgent protection should be considered.
- Forum analysis: Compare Turkish litigation, foreign litigation and arbitration from the perspective of cost, timing and enforcement.
- Pre-action strategy: Consider formal notice, negotiation and mandatory or voluntary mediation.
- Proceedings: Commence litigation or arbitration in the correct forum and preserve procedural objections.
- Enforcement: Move from the judgment or award to actual recovery against assets.
These stages should be considered as one strategy. The commercially best forum is not necessarily the forum in which it is easiest to obtain a judgment; it is the forum that provides the most effective route from dispute to recovery.
Frequently Asked Questions About Commercial Disputes in Türkiye
Is mediation mandatory before suing a Turkish company?
For specified commercial claims brought before Turkish courts, yes. The current regime includes certain monetary receivable, compensation, objection, negative declaration and restitution claims. Whether a particular claim is covered should be checked before proceedings begin.
Does mandatory mediation apply if the claimant is a foreign company?
Yes. Foreign status does not generally exempt a claimant where the proposed court action falls within the statutory regime.
How long does commercial mediation take in Türkiye?
The statutory period is normally six weeks, with a possible extension of up to two weeks. A straightforward case may conclude earlier.
How long does a commercial lawsuit take in Türkiye?
There is no fixed duration. The timeline depends on the court, subject matter, expert evidence, service and appeals. Complex cross-border cases may take years.
How much does it cost to sue in Türkiye?
Costs vary according to claim value and complexity and may include court fees, experts, translations, service, appeals, security requirements and legal fees.
Does a foreign company have to provide security before suing in Türkiye?
It may. Treaty and reciprocity-based exemptions can apply, so the claimant's country and legal status should be reviewed before filing.
Can a foreign company sue in Türkiye if the contract is governed by English law?
Potentially, yes. Governing law and court jurisdiction are separate questions, and the jurisdiction clause, Turkish private international law rules and mandatory provisions should be assessed.
Can the parties choose a foreign court?
In international contractual relationships, a foreign court jurisdiction agreement may be possible subject to Turkish private international law requirements and restrictions. The clause must be drafted carefully.
Can the parties choose ICC arbitration for a contract with a Turkish company?
Yes. International commercial agreements involving Turkish companies may use institutional arbitration such as ICC, provided the arbitration agreement is valid and appropriately drafted.
Is ISTAC only for Turkish companies?
No. ISTAC administers domestic and international disputes and is available to foreign parties where the arbitration agreement and applicable framework permit it.
Is arbitration cheaper than Turkish litigation?
Not necessarily. Court litigation often has lower direct institutional costs, while arbitration may offer commercial advantages for complex or high-value cross-border disputes.
Can an ICC award be enforced against a Turkish company?
Potentially, yes. Where the New York Convention applies, a foreign arbitral award may be recognised and enforced in Türkiye subject to its requirements and refusal grounds.
Can I directly enforce a foreign court judgment in Türkiye?
Usually not without first addressing the applicable recognition and enforcement requirements. Foreign judgments and foreign arbitral awards are subject to different legal regimes.
Will a Turkish court reconsider whether the foreign arbitrator made the correct decision?
The enforcement court does not normally retry the underlying commercial dispute on the merits. Its review is limited to the applicable recognition and enforcement conditions.
What should a foreign company do immediately after a dispute arises?
Preserve evidence, review the dispute resolution clause, check notice requirements and limitation deadlines, identify assets, stop harmful communications and assess whether an urgent interim measure is necessary.
Final Business Perspective
A commercial dispute with a Turkish company should not be reduced to the question, “Can we win the case?” The better questions are where the dispute should be brought, how much the full process will cost, how long the company can realistically wait, whether the counterparty can pay, whether assets are protected and whether the final judgment or award will be enforceable where those assets are located.
When a dispute requires a case-specific assessment
Commercial disputes can look similar at first but lead to very different strategies depending on the contract, evidence, applicable law, dispute resolution clause and location of the counterparty's assets. Before proceedings start, these factors should be assessed together. An early review can also identify procedural requirements, enforcement issues and risks that may not be apparent from the underlying commercial claim.
Turkish Trade Lawyers advises foreign companies on commercial disputes involving Turkish counterparties, including pre-action strategy, mediation, litigation, arbitration and recognition and enforcement matters.
This guide provides general information on Turkish law and does not constitute legal advice. The appropriate strategy depends on the contract, parties, assets, governing law, dispute value and circumstances of each case.
