Turkish companies with investments in Africa, Central Asia, and the Middle East have discovered that protecting their rights against sovereign states requires a fundamentally different legal strategy. International investment arbitration is often the only effective remedy available.

The Investment Treaty Framework

Türkiye has concluded Bilateral Investment Treaties (BITs) with over 90 countries, and is party to numerous multilateral investment agreements. These treaties typically provide investors with substantive protections — including fair and equitable treatment, protection from expropriation without compensation, and full protection and security — as well as access to international arbitration to enforce those protections.

Without a treaty, a Turkish company whose assets are expropriated by a foreign government may have no realistic recourse. With a treaty, it can bring an international arbitration claim directly against the sovereign state — bypassing the state’s own courts and seeking compensation before a neutral international tribunal.

Key Strategic Considerations

Treaty Selection and Jurisdiction

Identifying which treaty or treaties apply, and which arbitration forum provides the most advantageous framework, is one of the most critical early decisions. ICSID — the International Centre for Settlement of Investment Disputes — offers a self-contained system under World Bank auspices. UNCITRAL arbitration is more flexible and may be conducted under various institutional rules. The choice of forum affects procedure, available remedies, confidentiality, and enforcement.

The Role of Litigation Finance

International investment arbitration is expensive. Specialist litigation funders provide funding in exchange for a share of any eventual recovery — allowing claimants with strong cases to pursue their rights without prohibitive upfront cost. We have experience structuring litigation finance arrangements in investment arbitrations with claim values exceeding $100 million.

Enforcement of Awards

Sovereign states do not always comply voluntarily with investment arbitration awards. Enforcement may require separate proceedings in multiple jurisdictions, targeting the state’s commercial assets abroad. Enforcement strategy must be planned from the outset of the arbitration.

Common Pitfalls

• Treaty notice requirements — many BITs require written notice of a dispute before arbitration can commence
• Limitation periods — investment treaty claims can be time-barred; the clock may start from the date of the measure complained of
• Documentation — contemporaneous records of the investment, state measures, and damage suffered are critical
• Expert evidence — quantum of damages requires sophisticated economic expert evidence; selecting the right expert is essential

This article is provided for informational purposes only and does not constitute legal advice.