Arbitrability of Claims by State-Owned Banks

Abstract

Today, banks, whether state-owned or private, engage in various contracts such as account openings, loan facilities, bank guarantees, letters of credit, and others with their clients as part of their banking responsibilities. Misinterpretation of the terms of these contracts can lead to legal disputes. Until a few decades ago, banks showed little interest in referring their claims to arbitration due to various reasons, such as a misinterpretation of Article 139 of the Constitution and certain restrictions imposed on the arbitration institution by law, such as the inability to issue interim orders. However, this perception has gradually declined due to the privatization of most banks and the growing recognition of the arbitration institution. As a result, banks are increasingly inclined to resolve their disputes through arbitration, considering the unique features of arbitration, such as its international recognition and enforceability, the ability to utilize banking experts as arbitrators, confidentiality, expedited proceedings, and reduced costs. This paper, using a descriptive-analytical method, aims to determine whether the claims of state-owned banks are arbitrable. After examining the concepts and fundamental principles of the subject, the study concludes that, in principle, banking disputes, whether from state-owned or private banks, are arbitrable unless explicitly prohibited by the legislator.