Interest in arbitration has been gradually increasing in the Turkish legal system, and individuals are more frequently including arbitration clauses in their contracts for the resolution of disputes. However, the widespread use of arbitration agreements has also given rise to discussions regarding arbitrability and the enforceability of arbitral awards, particularly in areas considered to be closely related to public order.
Although there is no explicit legal provision under Turkish law prohibiting arbitration in relation to lease agreements, the general rule is that the disputes that are not subject to party autonomy are not arbitrable (See Article 1/4 of the Turkish International Arbitration Law No. 4686 (“International Arbitration Law”) and Article 408 of the Turkish Code of Civil Procedure No. 6100 (“TCCP”)). From this perspective, if the subject matter of the agreement or dispute is within the scope of party autonomy, there appears to be no obstacle preventing parties from resorting to arbitration in lease-related disputes.
On the other hand, since the legislator considers the tenant to be the weaker party in lease agreements, there are certain protective provisions which are generally deemed to be related to public order. Accordingly, the issue of arbitrability must be evaluated separately for different claims and regulatory provisions.
1. Arbitrability under Turkish Law
As adopted verbatim from the UNCITRAL Model Law, Turkish law recognizes non-arbitrability of a dispute as a ground for setting aside an arbitral award.
Pursuant to Article 1(4) of the International Arbitration Law, which constitutes the general provision governing arbitrability, disputes relating to rights in rem over immovable property located in Türkiye, as well as disputes that are not subject to the parties’ free disposition, are deemed non-arbitrable (see also Article 408 of the TCCP with respect to domestic arbitration).
2. Arbitrability of Claims Arising from Lease Agreements
Lease agreements are regulated under Articles 299 et seq. of the Turkish Code of Obligations No. 6098 (“TCO”) under three main categories: (i) general provisions, (ii) residential and roofed workplace leases, and (iii) agricultural leases. This distinction is decisive in determining arbitrability, as the TCO, particularly with respect to residential and roofed workplace leases, introduces mandatory provisions aimed at protecting the tenant and largely removes issues such as rent increase rates, determination of rent, and grounds for eviction from the parties’ sphere of disposition.
In this context, the arbitrability of disputes arising from lease agreements has been brought before the Turkish Court of Cassation in various cases, and the Court has adopted differing assessments depending on the type of dispute. Accordingly, the Court of Cassation has reached different conclusions with respect to claims concerning eviction, determination of rent, and recovery of rental receivables.
2.1. Arbitrability of Claims for the Determination of Rent
The determination of rent is governed by Article 344 of the TCO. The relevant provision is set out under the subcategory of residential and roofed workplace leases, which constitute a specific type of lease agreement. By virtue of this provision, the legislator stipulated that agreements concerning the rate of rent increase shall be deemed valid provided that they do not exceed the twelve-month average change rate in the consumer price index for the preceding lease year. Furthermore, it is provided that, in lease agreements exceeding five years in duration or renewed after five years, the rent for the relevant lease year may be re-determined by the court, taking into account various statutory criteria.
It may be stated that the jurisprudence of the 3rd Civil Chamber of the Court of Cassation concerning the arbitrability of actions for the determination of rent to be filed after the fifth lease year has become constant. As first articulated in its decision dated 02.12.2004 and numbered 2004/13018 E., 2004/13409 K., in disputes arising from residential and roofed workplace leases regarding the determination of rent, the parties are not entirely free to determine the rate of increase for the new lease period. In particular, considering the mandatory upper limit imposed by the legislator with respect to rent increases, it cannot be maintained that the parties are free to determine the rent at their discretion at the end of the five-year renewal period. In this regard, the Chamber holds that disputes concerning the determination of rent in residential and roofed workplace leases are not arbitrable, on the ground that such matters are not within the parties’ power of disposition.
2.2. Arbitrability of Eviction Claims
Unlike actions for the determination of rent, the case law of the Court of Cassation does not reflect a uniform approach with respect to the arbitrability of eviction claims. Although certain earlier decisions of the Court of Cassation contain assessments to the effect that eviction actions are arbitrable, the majority of the decisions hold that eviction claims are not arbitrable. In particular, in recent years, the Court of Cassation appears to have developed a consistent line of jurisprudence to the effect that eviction claims are non-arbitrable.
By way of example, in a decision of the 19th Civil Chamber of the Court of Cassation dated 16.12.2004, arbitration was held to be permissible in a dispute in which both parties were merchants.[i] In contrast, in a more recent decision rendered by the 3rd Civil Chamber dated 10.06.2025, the Court ruled that disputes concerning termination and eviction in residential and roofed workplace leases are not arbitrable, on the grounds that the grounds for termination and eviction are regulated as a numerus clausus and are subject to mandatory procedural rules.[ii]
Although the Court of Cassation has previously rendered decisions adopting differing approaches with respect to eviction claims, the current jurisprudence of the 3rd Civil Chamber maintains the view that such claims are not arbitrable. In this context, it can be said that the view that disputes concerning eviction claims are not arbitrable has taken firm root in Turkish judicial practice in recent years.
2.3. Arbitrability of Claims for Rental Receivables and Damages
The approach of the Court of Cassation with respect to claims for the recovery of rental receivables and compensation differs from its position concerning eviction and rent determination claims. The Court has consistently held that claims for the collection of rent and for damages arising from lease agreements are subject to the parties’ free will, do not involve matters of public policy, and are therefore arbitrable.
Indeed, in its recent decision dated 09.01.2024 (2023/5108 E., 2024/75 K.), the 3rd Civil Chamber of the Court of Cassation expressly stated that there is no legal impediment to resolving claims for rental receivables and damages through arbitration.
Conclusion
Arbitrability with respect to claims arising from lease agreements has diversified under Turkish law to the extent that it cannot be reduced to a single rule, and different legal assessments emerge for each type of claim. An examination of the Court of Cassation’s case law reveals that mandatory provisions aimed at protecting tenants in residential and roofed workplace leases are determinative, and that claims for the determination of rent and eviction in particular are not considered arbitrable on account of this mandatory legal framework. In contrast, since the parties’ free will is predominant with respect to claims for collection of rental receivables and compensation claims, there is no legal obstacle to resolving such disputes through arbitration.
In conclusion, although it is possible to include an arbitration clause in lease agreements, it cannot be said that such a clause will apply uniformly to all types of disputes. Arbitrability must be assessed separately for each claim, and especially in residential and roofed workplace leases, the mandatory limits prescribed by law must be taken into account. In this context, the arbitrability of disputes arising from lease relationships should be concretized, taking into account the nature of the claim and whether it lies within the parties’ free disposition.
[i] CoC 19th Civil Chamber, decision dated 16.12.2004, numbered 2004/5413 E., 2004/12656 K.; see also CoC 14th Civil Chamber, decision dated 14.12.2010, numbered 2010/11426 E., 2010/13965 K.
[ii] CoC 3rd Civil Chamber, decision dated 10.06.2025, numbered 2025/893 E., 2025/3205 K.; similarly, CoC 3rd Civil Chamber, decision dated 26.06.2024, numbered 2023/4108 E., 2024/2037 K.