 is seeking to offset a $1.47 billion international arbitration penalty in a US enforcement case by counting it against decades-old Iraqi debts, opposition lawmaker Deniz Yavuzyılmaz said in a post on X, citing court filings in Washington.){kind=link}
Turkey and Iraq have submitted competing calculations of an international arbitration award in a US enforcement case, with Baghdad claiming Turkey still owes it approximately $601.9 million and Ankara arguing that the award’s interest provisions leave Iraq owing Turkey approximately $956.9 million.
The dispute concerns how interest should be calculated on compensation awarded to both countries. The tribunal had already incorporated Iraqi debts dating to 1990 into Turkey’s counterclaims and set off the principal amounts before ordering Turkey to pay Iraq a net $1.47 billion.
The case stems from a February 2023 arbitration award that found Turkey liable for loading Iraqi crude at Ceyhan on the Kurdistan Regional Government’s instructions rather than those of Iraq’s federal Oil Ministry. The tribunal ordered Turkey to pay Iraq a net principal amount of $1,471,390,486.05, subject to interest adjustments.
US enforcement case
Iraq filed a petition in April 2023 asking the Washington court to recognize and enforce the award under the New York Convention and the US Federal Arbitration Act.
Iraq initially sought recognition of the $1.47 billion net principal award plus interest. It later calculated the interest-adjusted balance at approximately $601.9 million. Turkey disputed that calculation and argued that interest accruing on its counterclaims reversed the net balance, leaving Iraq owing approximately $956.9 million. The US court has not adopted either side’s calculation.
Opposition lawmaker Deniz Yavuzyılmaz portrayed Ankara’s position as an attempt to avoid paying the award by relying on old Iraqi debts. Those debts, however, were not introduced for the first time in Washington. They formed part of Turkey’s counterclaims in the arbitration and had already been incorporated into the tribunal’s net principal award.
The Paris Court of Appeal rejected Turkey’s application for partial annulment on March 10, 2026, leaving the award in place. The Washington proceeding over recognition and the interest adjusted judgment amount remains pending.
Pipeline dispute
The dispute is tied to oil shipments carried out between May 2014 and September 2018 through the Iraq–Turkey crude oil pipeline.
An International Chamber of Commerce tribunal ruled in February 2023 that Turkey violated the pipeline agreements by loading Iraqi crude at Ceyhan on instructions from the Kurdistan Regional Government rather than Iraq’s federal Oil Ministry. It rejected Iraq’s claims concerning the transportation and storage of Kurdish crude and the regional government’s use of the pipeline.
The tribunal awarded Iraq $1.325 billion for excess transportation charges and $673 million for losses connected to discounted oil sales, while awarding Turkey approximately $526.6 million on counterclaims. After setting off the principal amounts, it ordered Turkey to pay Iraq $1.47 billion, subject to interest adjustments.
Alleged missing funds
In August and December 2025, Turkish Minute reported on Yavuzyılmaz’s claims regarding the handling of transportation fees paid by the KRG.
He said oil reports prepared for the Kurdistan Regional Government by Deloitte show $2.32 billion in tariff payments to the Turkish Energy Company, a Jersey-registered firm tied to Turkey’s side of the trade, during the same period.
According to Yavuzyılmaz, $904 million was transferred to state pipeline operator BOTAŞ, while the remaining $1.416 billion was not accounted for.
The arbitration award itself does not document any transfer from the Turkish Energy Company to BOTAŞ or any missing balance. Those elements are Yavuzyılmaz’s claims based on his reading of the Deloitte reports and Turkish audit records.
In December he further alleged that the Jersey-based company was later shut down and replaced by a similarly named firm registered in Ankara after the transactions drew international scrutiny.
No domestic investigation
Despite the arbitration ruling, Yavuzyılmaz has said no investigation has been launched in Turkey into the oil shipments or the financial transactions he described.
Instead, prosecutors opened an investigation into the lawmaker for publicly disclosing the arbitration decision and related documents.
Editor’s note: This article was corrected on July 13, 2026. An earlier version inaccurately described Turkey as seeking to offset a separate $1.47 billion award against decades old Iraqi debts in the US enforcement case. The arbitration tribunal had already awarded Turkey approximately $526.6 million on counterclaims, including unpaid charges dating to 1990, and set those amounts against Iraq’s gross award to produce a net principal of $1.47 billion in Iraq’s favor before interest adjustments. The subsequent dispute concerns the parties’ competing calculations of interest. The article was also updated to include the March 10, 2026 rejection of Turkey’s annulment application in Paris. The headline, lead and background have been revised.