Arbitration
GAR Live: Istanbul 2026 Conference
The 13th edition of the GAR Live: Istanbul Conference, organized by Global Arbitration Review (GAR), was held on 25 June 2026 at Çırağan Palace Kempinski. In addition to sponsoring the event, our Senior Partner and Head of Disputes, Ergin Mizrahi LL.M. and our Senior Associate Mustafa Mert Dicle LL.M. participated as speakers in the panel titled “Sector Focus: Energy Disputes”.
During the panel, they discussed key developments in the oil and gas, nuclear, and renewable energy sectors, primarily focusing on disputes arising from supply and price revisions, operating agreements, construction projects, and legislative and regulatory changes; sharing valuable insights on “The Future of Renewable Energy Disputes.” Their contribution also focused on the enforcement of foreign arbitral awards and public policy considerations.
The Court of Appeal reverses once again! Its precedent regarding the applicability of arbitration clauses in bankruptcy proceedings
For many years, the Court of Appeal (“CoA“) maintained that bankruptcy proceedings fell within the exclusive jurisdiction of Turkish courts, preventing parties from relying on arbitration clauses in such disputes. Although this approach shifted in 2013 in favor of recognizing arbitration agreements, the Grand Chamber reverted to its earlier, more restrictive stance in a 2021 decision, holding that bankruptcy proceedings could continue before Turkish courts notwithstanding a valid arbitration clause.
In a recent decision dated 1 October 2025 (2025/512 E., 2025/591 K.), the Grand Chamber of the CoA has once again changed course and restored an arbitration-friendly approach. The court held that where the disputed receivable is subject to a valid arbitration agreement, the parties must first resolve the underlying dispute through arbitration before initiating bankruptcy proceedings. If a bankruptcy action is nevertheless brought and the defendant timely raises an arbitration objection, the court must dismiss the case on procedural grounds, provided the dispute is arbitrable.
In reaching this conclusion, the Grand Chamber emphasized that determining the existence and amount of the receivable is a substantive issue that falls within the scope of the parties’ arbitration agreement. The court further relied on the principles of good faith and pacta sunt servanda, finding that directly initiating bankruptcy proceedings despite an agreed arbitration clause constitutes an attempt to circumvent the parties’ chosen dispute resolution mechanism.
This latest decision marks a significant return to a pro-arbitration approach in Turkish case law. By reaffirming the enforceability of arbitration agreements even in the context of bankruptcy-related disputes concerning arbitrable receivables, the Grand Chamber reinforces party autonomy and limits attempts to bypass arbitration through bankruptcy proceedings.
You can read our full article on this topic from here.
The limits of court assistance in interim measures and precautionary attachment orders rendered by arbitral tribunals
Parties to arbitral proceedings frequently seek interim measures and interim attachment orders to protect their rights until the final award is rendered. However, where such decisions are not voluntarily complied with, the question of whether they may be rendered directly enforceable through court assistance has long remained a subject of debate. While Article 414 of the Turkish Code of Civil Procedure No. 6100 allows courts to grant an enforceability annotation to interim measures rendered by arbitrators, this mechanism is limited to interim measures and does not extend to interim attachment orders. By contrast, Article 6 of the International Arbitration Act (“IAA“) refers only to “court assistance” without providing for an enforceability annotation, creating uncertainty as to the nature and scope of such assistance.
This uncertainty has resulted in differing views in doctrine and practice as to whether court assistance under the IAA permits the direct enforcement of arbitral interim decisions or requires the court to issue a new and independent interim protective measure. In line with these discussions, parties have frequently applied to the courts for the granting of an enforceability annotation where interim measures or interim attachment orders rendered by arbitral tribunals have not been complied with.
In a recent decision, the Ankara 10th Commercial Court of First Instance rejected an application seeking an enforceability annotation for an interim attachment order rendered by an arbitral tribunal. The court held that the concept of “court assistance” under the IAA is not intended to confer enforceability on arbitral decisions but merely authorizes the court to determine whether a new interim protective measure should be granted within the scope of its own authority. The decision therefore confirms that, under the IAA, parties seeking judicial assistance should apply for a new interim measure or interim attachment order, rather than request an enforceability annotation for the arbitral tribunal’s decision. Otherwise, where an application is made for the granting of an enforceability annotation to an arbitral decision, there is a significant likelihood that such request will be dismissed under the existing legal framework.
You can read our full article on this topic from here.
Litigation
A strong alternative to litigation: settlement through attorneys (Attorneyship Act Art. 35/A) or voluntary mediation?
There are alternatives available for resolving disputes without turning them into lengthy and costly litigation processes. Except for cases where mandatory mediation applies, these alternatives are: (i) settlement through attorneys pursuant to Article 35/A of the Attorneyship Act, and (ii) voluntary mediation.
Settlement under Article 35/A is available before a lawsuit is filed or, if proceedings have already commenced, until the first hearing begins, and offers significant advantages in terms of cost, speed, confidentiality and enforceability.
One of the defining features of settlement under Article 35/A is that the process must be conducted exclusively through the parties’ attorneys. Under this procedure, an attorney invites the opposing party to settle in writing. If the invitation is not accepted within two weeks, it is deemed rejected. Where a settlement is reached, the settlement record signed by the parties and their attorneys is deemed to have the force of a court judgment pursuant to Article 38 of the Enforcement and Bankruptcy Code and may be directly enforced without the need for a court decision or an enforceability annotation, provided that the parties’ obligations are clear, definite and unconditional.
Both voluntary mediation and settlement under Article 35/A are available only for disputes over which the parties may freely dispose and ensure the confidentiality of settlement negotiations. However, unlike settlement under Article 35/A, voluntary mediation is conducted by an independent mediator, representation by an attorney is not mandatory, and the parties are required to bear the mediator’s fee.
You can read our full article on this topic from here.
An important Constitutional Court decision on procedural dismissal in indefinite claim lawsuits
The Constitutional Court has rendered a significant decision that will guide judicial practice regarding the long-debated issue of the procedural dismissal of certain employment-related claims on the grounds that an indefinite claim lawsuit cannot be filed, due to the absence of a condition of action.
In the dispute subject to the decision dated 15 April 2025, application no. 2019/1844, published in the Official Gazette on 6 January 2026, the applicant’s severance pay and annual leave pay claims were dismissed on procedural grounds for lack of a condition of action, on the basis that these receivables were determinable in nature and therefore could not be brought as an indefinite claim lawsuit.
The Constitutional Court examined this approach within the framework of constitutional proportionality and emphasized that the right of access to a court is a fundamental element of the right to a fair trial guaranteed under Article 36 of the Constitution. While acknowledging that procedural rules are necessary for the orderly conduct of judicial proceedings, the Court clearly stated that such rules cannot be applied so rigidly as to eliminate the freedom to seek legal remedies. According to the Constitutional Court, where it is concluded that the conditions for filing an indefinite claim lawsuit are not met, directly resorting to procedural dismissal is disproportionate, given that less restrictive procedural alternatives are available, such as treating the case as a general performance action, requesting the claimant to clarify the claim, or allowing deficiencies to be remedied. Accordingly, the Court ruled that the right of access to a court had been violated and ordered a retrial.
In its decision, the Constitutional Court also made an explicit reference to its earlier ruling in the İsmail Avcı application, emphasizing that it has consistently reviewed the practice of procedural dismissal in indefinite claim lawsuits within the scope of the right of access to a court, rather than doing so for the first time. This demonstrates that the decision is not an isolated ruling, but rather a continuation of the Court’s established constitutional approach.
Constitutional Court decision dated 16 April 2026 and numbered E. 2025/231, K. 2026/82, regarding the partial claim mechanism under Article 109 of the Turkish Code of Civil Procedure
In its decision published in the Official Gazette dated 30 June 2026, the Constitutional Court has rendered its decision on the application concerning the partial claim mechanism regulated under Article 109 of the Turkish Code of Civil Procedure. The Ankara 73rd Labor Court had argued that the title of the article, the provision stating that “only a portion of a claim may be asserted through legal proceedings where the subject matter of the claim is divisible by its nature,” and the term “partial” in the third paragraph were contrary to the Constitution.
The Constitutional Court held that article headings, in themselves, do not constitute normative legal rules containing commands, prohibitions, permissions or authorizations, and therefore ruled that there was no need to render a decision regarding the challenge to the title. The Court examined the provisions governing partial claims within the framework of the freedom to seek legal remedies, the right to a fair trial, the principle of procedural economy, and the legislature’s discretion to regulate procedural rules.
In its reasoning, the Court emphasized that the possibility of bringing a partial claim facilitates access to justice, particularly for claimants facing the risk of substantial court fees and litigation costs. It further noted that, unless the claimant expressly waives the remaining portion of the claim, filing a partial claim does not constitute a waiver of the unclaimed balance, and that this approach is consistent with the underlying rationale of the partial claim system. Accordingly, the Court unanimously held that the relevant paragraph and the term “partial” are not contrary to the Constitution and dismissed the objection.
You can read the full decision from here.
Decision of the General Assembly of the Unification of Jurisprudence of the Court of Appeal, dated 8 May 2026, E. 2021/8, K. 2026/1, on whether a claim that was not included in the statement of claim may subsequently be introduced into the proceedings through partial amendment
In its decision published in the Official Gazette dated 30 June 2026, the General Assembly of the Unification of Jurisprudence of the Court of Appeal has resolved the divergence in the case law among the civil chambers regarding whether a claim that was not included in the statement of claim may subsequently be introduced into the proceedings through partial amendment.
The decision establishes that a claim not asserted in the statement of claim cannot be incorporated into the proceedings by way of partial amendment. The Assembly emphasized that the statement of claim constitutes the fundamental procedural document defining the scope of the proceedings and that the relief sought must be clearly set out therein. It further explained that partial amendment serves the purpose of correcting an existing procedural act or increasing or expanding a claim already asserted in the statement of claim. By contrast, introducing an entirely new claim that has never previously formed part of the proceedings would, in effect, transform partial amendment into a means of filing an additional lawsuit.
The decision also noted that the preliminary examination stage determines the boundaries of the dispute and that subsequently expanding those boundaries through new claims could undermine the procedural framework established under the Turkish Code of Civil Procedure, as well as the principles of legal certainty and foreseeability, equality of arms, and the right to a trial within a reasonable time. Accordingly, by majority vote, the Assembly held that a claim not included in the statement of claim cannot be introduced into the proceedings through partial amendment.
You can read the full decision from here.
Law no. 7589 on Amendments to Certain Laws to Enhance the Efficiency and Effectiveness of The Judiciary enters into force
On 31 July 2026, Law No. 7589 (the “Law“), commonly referred to as the “12th Judicial Reform Package”, was published in the Official Gazette. The Law introduces significant structural reforms to the Turkish legal system with amendments across several key procedural laws.
The Law introduces notable changes to enforcement proceedings and civil litigation, including new rules governing judicial sales of inherited real estate, security deposit requirements for co-owners, and stricter consequences for bidders who fail to pay the purchase price. It also abolishes the indefinite claim lawsuit, allows the amount claimed in a partial lawsuit to be increased once until the end of the investigation phase, provides for the electronic sale of assets belonging to persons under guardianship, and limits the interval between hearings in proceedings subject to the written procedure to three months, subject to limited exceptions.
The Law also amends criminal and administrative proceedings by revising the rules on the suspension of the pronouncement of the judgment (“HAGB”), excluding its application to certain offences involving torture and ill-treatment, expanding the jurisdiction of single-judge administrative courts, introducing disciplinary consequences for unnecessary expert appointments, and granting reduced sentences in certain fraud cases involving the provision of bank account or IBAN details.
In addition, the Law implements several amendments following Constitutional Court annulment decisions, including linking the statutory interest rate to 80% of the Central Bank’s rediscount rate, revising the calculation of compensation for loss of earning capacity and loss of support, and expanding the availability of appeals before the Court of Appeals for certain appellate court decisions.
You can read the full Law from here.
Constitutional Court decision dated 26 February 2026 (E. 2026/49, K. 2026/48) on appeal restrictions based on monetary thresholds
In its decision published in the Official Gazette dated 21 May 2026, the Constitutional Court reviewed subparagraph (a) of the first paragraph of Article 362 of the Turkish Code of Civil Procedure, which precludes appeals before the Court of Appeal against decisions of the regional courts of appeal in cases falling below a specified monetary threshold, insofar as it applies where an appeal before the regional court of appeal is upheld in whole or in part. In the case at hand, the issue concerned the inability to file an appeal before the Court of Appeal in disputes not exceeding TRY 682,000 as of 2026.
While the Constitutional Court acknowledged that monetary thresholds for appeals may, in principle, serve the legitimate aims of procedural economy and ensuring trial within a reasonable time, it found it disproportionate to deny the parties access to the Court of Appeal where the regional court of appeal overturns the first-instance judgment and renders a new decision on the merits. Accordingly, the Constitutional Court unanimously annulled the provision, insofar as it applies where the appeal before the regional court of appeal is upheld in whole or in part, holding that it violates Articles 13 and 36 of the Constitution.
You can read the full decision from here.
A significant decision from the Court of Appeal on the exclusion of weekly rest days from annual paid leave periods
In its decision dated 3 February 2026 and numbered 2025/9525 E., 2026/757 K. (“Decision“), the 9th Civil Chamber of the Court of Appeal published in the Official Gazette No. 33275 dated 9 June 2026 assessed whether weekly rest days falling within an annual paid leave period may be counted as part of the employee’s annual leave entitlement. The dispute arose from a claim for annual leave pay, where the employer argued that the employee had exhausted all annual leave based on the leave records.
Upon an appeal in the interest of the law, the Court of Appeal found that although the employee had been recorded as having taken 28 days of annual leave, four of those days corresponded to weekly rest days. Referring to Article 56 of the Turkish Labor Law No. 4857, the Court held that weekly rest days cannot be deducted from annual leave entitlement and therefore concluded that the employee retained an outstanding entitlement to four days of annual leave.
The Decision also reiterates that the burden of proving that annual leave has been duly granted rests with the employer and that unused annual leave converts into a monetary receivable upon termination of employment, regardless of the manner of termination. In addition, the Court of Appeal emphasized that merely indicating the total number of leave days in annual leave records may not be sufficient, as the actual leave period and the weekly rest days, national holidays and public holidays falling within that period must also be taken into account.
You can read our full article on this topic from here.
A significant decision from the Court of Appeal on the validity of voluntary mediation settlement agreements in employment termination processes
In its decision dated 10 February 2026 (“Decision“), the 9th Civil Chamber of the Court of Appeal assessed the validity of a voluntary mediation settlement agreement executed on the same day as the termination of the employment relationship. In the case at hand, the employee sought the annulment of the settlement agreement, alleging that his free will had been impaired and that he had been directed by the employer to sign the agreement immediately after the termination. The Court of Appeal upheld the lower courts’ finding that the agreement was invalid.
The Decision emphasizes that voluntary mediation should provide a genuine negotiation environment and should not be used merely as a formal mechanism to prevent employees from bringing future claims. The Court of Appeal considered the fact that the mediation application, settlement agreement and final mediation minutes were all completed on the same day as the termination as an important indication that the employee had not been given sufficient time to assess the settlement. It also stressed the importance of the employee’s free will in the initiation of the mediation process, the selection of the mediator and the conduct of the mediation proceedings.
The Court of Appeal further reiterated that the mediator’s duty to inform must be properly fulfilled and that the payment made under a voluntary mediation settlement agreement must be reasonable and proportionate in light of the employee’s statutory entitlements, seniority and wage level. Where a mediation settlement effectively functions as a mutual termination agreement, the employee must receive a reasonable benefit beyond accrued statutory rights. The Decision therefore demonstrates that voluntary mediation settlement agreements executed simultaneously with the termination of employment and providing broad releases of employment-related claims may carry a significant risk of invalidity if the process does not genuinely safeguard the employee’s free will and interests.
You can read our full article on this topic from here.
Landmark Court of Appeal decision regarding the severance pay ceiling
The 9th Civil Chamber of the Court of Appeal, in its decision dated 11 February 2026, held that where an employment contract is terminated without observing the statutory notice period, the employee may benefit from any increase in the severance pay ceiling occurring during the notice period. The dispute arose from a case in which the employee’s employment was terminated shortly before completing seven years of service, and the employee claimed that, had the notice period been observed, he would have become entitled to both a higher severance payment and an increased annual leave entitlement.
The Court upheld the finding that the termination was unjustified and confirmed the employee’s entitlement to severance pay and notice pay. It further held that, since the employer neither observed the notice period nor paid notice compensation, the severance pay should be calculated based on the increased severance pay ceiling that came into effect during the statutory notice period.
However, the Court rejected the employee’s claim for additional annual leave entitlement, holding that there is no legal basis for allowing annual leave to accrue during a notice period that was not actually observed. Accordingly, while employees may benefit from an increase in the severance pay ceiling occurring during the statutory notice period, they cannot claim annual leave rights that would have arisen had the notice period been served.
You can read our full article on this topic from here.
What does the new maternity leave regulation cover?
The enactment of Law No. 7578, titled “Law on Amendments to the Social Services Law and Certain Other Laws,” published in the Official Gazette No. 33240 dated 1 May 2026, has introduced significant amendments to maternity leave provisions across several major pieces of legislation, including the Labor Law and the Civil Servants Law. The most substantial structural change is the extension of the total maternity leave duration, which has increased from 16 weeks to 24 weeks. While the prenatal leave entitlement remains fixed at 8 weeks, the postnatal leave period has been doubled, rising from 8 weeks to 16 weeks to better support recovery and childcare.
The new regulation also refines the operational aspects of pregnancy and parental support to address modern family needs. Pregnant employees, subject to medical approval and their own request, are now permitted to continue working until 2 weeks before childbirth, a change from the previous three-week threshold. Furthermore, the law expands support for families by increasing paid paternity leave from 5 days to 10 days and introducing a new entitlement for foster parents, who may now request 10 days of unpaid leave upon the child’s placement. Importantly, the long-standing provision allowing for up to 6 months of unpaid leave following the conclusion of maternity leave remains in effect without any modifications.
Finally, the legislation provides essential transitional provisions to ensure that employees who were on maternity leave at the time of enactment are not excluded from these benefits. Specifically, individuals currently on maternity leave are covered, as are those whose leave has concluded but who have not yet reached the 24-week period since childbirth as of April 1, 2026. To take advantage of these new provisions, eligible employees must submit a formal request within 10 working days of the law’s effective date of May 1, 2026, which, upon approval, grants them an additional 8 weeks of maternity leave.
You can read our full article on this topic from here.
Do salary increases during the notice period affect the employee in cases where the employment contract is terminated by the employer without granting the notice period and where notice compensation is paid incompletely?
According to the established jurisprudence of the Court of Appeal, the employment relationship is deemed to continue until the end of the notice period. Accordingly, employees are entitled to benefit from any salary increases that become effective during the notice period, and termination-related receivables must be calculated on the basis of the increased salary. However, differing approaches had emerged regarding whether this principle also applies where the employer terminates the employment contract without granting the notice period and pays notice compensation incompletely.
To resolve this inconsistency, the 9th Civil Chamber of the Court of Appeal, in its decision dated 18 June 2025 (“Decision“), held that where an indefinite-term employment contract is terminated without duly granting the notice period and without full payment of notice compensation, the employee must also benefit from salary increases implemented until the end of the statutory notice period. The Court thereby adopted the approach previously followed by the İzmir Court of Second Instance.
The Decision also clarifies that employees who continue working during the notice period benefit from salary increases occurring during that period, and that the same principle applies where the notice period is not observed and notice compensation is paid incompletely. However, where the employer terminates the employment contract without granting the notice period but pays the notice compensation in full, salary increases that would have occurred during the notice period will not be taken into account. Accordingly, the Decision highlights the importance of accurately calculating and fully paying notice compensation in termination processes.
You can read our full article on this topic from here.
A notable Constitutional Court decision on the dismissal of labor claims with a foreign element on statute of limitations grounds
The Constitutional Court has issued an important decision concerning the dismissal of labor claims arising from employment contracts with a foreign element on statute of limitations grounds. The Court held that limitation periods cannot be applied automatically or in a purely formalistic manner, particularly where the applicable law governing the employment relationship has not been properly determined.
In the case at hand, the first-instance court dismissed the employee’s claims by applying the statute of limitations under Russian law, accepting that Russian law governed the employment relationship. The Constitutional Court found that the lower court had failed to examine whether a valid choice-of-law agreement existed, whether Russian law was indeed applicable, and whether the employment relationship maintained a sufficient connection with Turkish law before dismissing the case on limitation grounds.
The Court emphasized that the applicable law, the validity of any choice-of-law agreement, and the factual circumstances of the employment relationship (including the place of work and the parties’ actual relationship) must be comprehensively assessed before ruling on a statute of limitations defense. The Decision therefore highlights that references to foreign law in employment contracts or shorter limitation periods under foreign law will not, by themselves, justify the dismissal of employment claims without a proper examination of the merits and the applicable legal framework.
You can read our full article on this topic from here.
Contacts
Pekin Bayar Mizrahi
Ergin Mizrahi, LL.M.
Senior Partner
Tel +90 (212) 359 5700
e.mizrahi@pekin.com.tr
Pekin Bayar Mizrahi
Maral Celepyan Avşar
Partner
Tel +90 (212) 359 5700
m.avsar@pekin.com.tr