Client Alert:

Arbitrator’s Fees Remain Unchanged For Another Year

Arbitrator’s Fees Remain Unchanged For Another Year

The Communique on Tariff of Fees for International Arbitration (the “Communique”) issued by the Ministry of Justice has been published in the official gazette on March 8, 2016.

The Communique that will enter into force on March 15, 2016 will regulate the fees applicable to arbitral proceedings commenced pursuant to the Turkish International Arbitration Law (the “TIAL”). The tariff of fees determined by the Communique, which remain unchanged since 2012, are as follows:

 VALUE OF THE DISPUTE    Fee of SOLE Arbitrator    Fees for THREE (3) or MORE Arbitrators
Up to TRY 500,000.00 5% 8%
Subsequent TRY 500,000.00 4% 7%
Subsequent TRY 1,000,000.00 3% 6%
Subsequent TRY 3,000,000.00 2% 4%
Subsequent TRY 5,000,000.00 1% 2%
Exceeding TRY 10,000,000.00 0.1% 0.2%

Pursuant to Article 16 of the TIAL, the rates stated within the aforementioned table shall be applicable to international arbitration cases in the event of occurrence of any one of the following events:

• Failure of the parties to the arbitration and the tribunal to reach an agreement on the fees, or

• Absence of a provision within the arbitration clause as to determination of the fees, or

• Failure of the parties to the arbitration to refer to established international rules or institutionalized arbitration rules with regard to the fees.

The Communique also sets out the rules for the partial payment of a tribunal in specific cases where an arbitral award cannot be granted. According to Article 4(3) of the Communique, under certain circumstances listed under article 13(B) of the TIAL such as the proceedings becoming devoid of its subject, parties’ withdrawal of the claim and settlement of the dispute; the parties will be obliged to pay half of the fee if the arbitrators are yet to determine a specific term for the submission of evidence, and the full amount of the fee if the arbitrators have already determined a specific term for the same.

Pursuant to Article 6 of the Communique, in the event that a partial award is granted by a tribunal, parties will be obligated to pay a fee calculated on the basis of the amount awarded. However, it should be noted that if the partial award is granted as a final award, parties will be burdened to pay the fees in full calculated in accordance with the aforementioned table.

Even though the tribunal may order the claimant to deposit a portion of the fees in advance, they shall be entitled to receive payment for their services after the completion of the arbitral proceedings. In other words, fee(s) payable to the tribunal shall be determined based on the tariff of fees applicable on the date the relevant arbitral proceeding has come to an end. Therefore, a party submitting to arbitration governed by the TIAL should bear in mind that the fees payable at the end of arbitral proceedings may not be the same as the fees calculated before the commencement of such proceedings.

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