Istanbul bids for leadership in international arbitration
Istanbul is making a bid to become a regional leader in the trillion-dollar business of legal arbitration, used for major corporate litigation or disputes between sovereign states.
Arbitration provides an alternative to years of expensive litigation in courts.
"There is definitely a great chance for an international arbitration center in Istanbul to be successful, but it will take time," said London-based international arbitration expert Gaetan Verhoosel.
The stakes are high. The total value of global arbitration claims and counterclaims hit $1.7 trillion in 2014, according to The Global Arbitration Review. The review sees claims growing larger and increasing in volume.
But there are concerns in the arbitration field about whether Istanbul can create an arbitration center that will compete with the current regional leaders in Singapore and Dubai.
Provisions for binding arbitration as an option in disputes are now employed in virtually every type of contract, as well as in international treaties between sovereign nations, said Thomas J. Stipanowich, a professor of law at Pepperdine University in California.
On Nov. 20, Parliament passed a law laying the legal framework for the center; there is to be one forum for domestic disputes and another for international arbitration. Parliament also adopted a law allowing arbitration in a wide variety of legal disputes. Funding for the center will be provided by the Prime Ministry for two years.
There are some challenges in Istanbul's ability to attract arbitration proceedings. "It is essential that the arbitration center demonstrates its independence," said Verhoosel. "It must build up its credentials in terms of international capability and independence."