I. INTRODUCTION

Arbitration is a judgement-like alternative dispute resolution method, which is preferred by the parties instead of the court in matters that they can freely dispose of, and which resolves the dispute definitively. The parties apply to specialised persons who know the technicalities of the business in order to resolve the dispute quickly and relatively inexpensively. At this point, it is important whether the dispute contains a foreign element or not. There is no supranational court or institution established for the impartial and independent settlement of disputes arising out of private international law at the international level. Therefore, arbitration proceedings are frequently resorted to for the quick and reliable resolution of disputes arising out of private international law.

There are different types of arbitration, such as compulsory and voluntary, ad hoc and institutional, national and international. It is important whether the arbitral awards are domestic or foreign. The fact that the arbitral awards are related to national or international law causes the remedies to change when the enforcement of these awards comes to the agenda.

While the enforcement of national arbitral awards is carried out in accordance with the Code of Civil Procedure, arbitral awards with a foreign element are executed in accordance with the International Arbitration Law.

Recognition refers to the effect of an award as a final judgement, while enforcement refers to the ability to enforce the award in a foreign country in addition to the final judgement. In this article, the recognition and enforcement of arbitral awards made in accordance with the International Arbitration Law will be discussed.

II. OVERVIEW

Before discussing the recognition and enforcement procedures, it is useful to examine arbitral awards. In this respect, expert reports, assessments or experts that do not qualify as arbitral awards cannot be subject to recognition and enforcement. 1

A foreign arbitral award is not defined in the IPPL or any other law. Whether an award is a foreign arbitral award is determined by a Turkish judge in accordance with Turkish law. Accordingly, the determination of a foreign arbitral award involves a number of considerations such as the country of the award, the nationality of the parties, the place of residence of the parties, the arbitration agreement, and the place where the arbitration agreement was concluded.

III. RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS UNDER THE LAW ON INTERNATIONAL PRIVATE LAW AND PROCEDURE

First of all, it should be noted that Article 60 of the IPPL deals with the rules on the enforcement of foreign arbitral awards, and Article 63 states that the rules on enforcement shall also apply to the recognition of foreign arbitral awards. When the legal regulations of other countries are examined, it is seen that the recognition and enforcement of foreign arbitral awards are subject to the same conditions.

Article 60 of the IPPL stipulates that for the recognition and enforcement of foreign arbitral awards;

  • The decision must have been finalised and become enforceable or,
  • The decision should be binding for the Parties.

In other words, in order for a foreign arbitral award to be recognised and enforced under Turkish law, it must have become final or enforceable or binding under the law of the country that rendered the award or the country to which the award is subject.

BINDING FORCE REQUIREMENT

Binding nature and conclusiveness of an arbitral award are different concepts. In some legal systems, the concept of binding is interpreted as the foreign arbitral award being finalised in the court where it was rendered, whereas in other legal systems, it is interpreted as the exhaustion of all legal remedies against the award rendered as a result of the arbitration proceedings.

The scope of application of the New York Convention of 1958, which was ratified and entered into force by our country with Law No. 3731 dated 08.05.1992, is the recognition and enforcement of a foreign arbitral award arising out of an international commercial dispute. According to Article 5 of the New York Convention, for the recognition and enforcement of a foreign arbitral award, the award must be binding.

The notion of binding force is understood to mean that the parties agree in the arbitration agreement that the arbitral award shall be deemed final or conclusive or immediately enforceable or, to the extent applicable, that the parties shall be deemed to have waived the right to appeal.2

According to the New York Convention, an application to the court or exhaustion of legal remedies is required to fulfil the condition of binding force. Again, according to the New York Convention, it is not necessary to obtain a certificate of finality from the court where the award was rendered in order to be binding. According to this convention to which we are a party, binding force is achieved when the arbitral award precludes the parties from filing a lawsuit before the state courts.3

Of course, an arbitral award is not binding if it is suspended, annulled or time-barred after it has become final under the law of the country in which it was made or to which it is subject.

DEFINITIVE JUDGEMENT REQUIREMENT

A final judgement is a quality that conclusively ends the dispute between the parties, prevents retrial, and thus ensures the preservation of stability and confidence in the law. In this respect, of course, the fact that an arbitral award is a final judgement prevents the dispute between the parties from continuing forever, settles the dispute quickly and relatively inexpensively, and prevents the issuance of contradictory decisions. Of course, situations such as change of the subject matter of the dispute, change of the parties, change of the cause of action are kept separate.

A final decision and a final judgement are different concepts. A final judgement is obtained when a judge or an arbitrator withdraws his/her hand from the case after making a decision, and a final judgement is obtained when the period of application for legal remedies against the final judgement expires or if a decision is taken as a result of the application.

In this context, the fact that an award rendered as a result of an arbitral proceeding cannot be reopened for litigation indicates that the award has become final.

We have already mentioned that the New York Convention of 1958 applies to the procedure for the recognition and enforcement of foreign arbitral awards rendered as a result of arbitration proceedings. For the recognition and enforcement of foreign arbitral awards not covered by the New York Convention, the provisions of the IPPL No. 5718 shall apply.

Article 224, paragraph 1 of the Code of Civil Procedure No. 6100 stipulates that official documents issued by foreign state authorities shall be recognised in Turkey only if they are approved by the competent authority to which the document was issued or the relevant Turkish consular authority. Paragraph 2 of the Article states that the provisions of international conventions to which Turkey is a party regarding the approval of foreign official documents are reserved.

RECOGNITION AND ENFORCEMENT PROCEDURE ACCORDING TO IPPL

According to the IPPL, in order to recognise and enforce a foreign arbitral award in Turkey, an award must first be obtained from the competent court.

1. Authorised and Competent Court

According to IPPL Art. 60/2 "Enforcement of foreign arbitral awards shall be requested by petition from the court of first instance in the place agreed upon in writing by the parties. In the absence of such an agreement between the parties, the court of the place of residence of the party against whom the award is rendered in Turkey, or if that is not the case, the court of the place where the goods that may be subject to enforcement are located, shall be deemed competent."

If there is no one of the places specified in the relevant article of law, the Turkish Court is not competent to issue a recognition and enforcement decision. The Turkish court is obliged to issue a decision of lack of jurisdiction upon the opposing party's objection to jurisdiction.4

2. Documents to be submitted to the Court

Pursuant to Article 61/1 of the IPPL, the party seeking enforcement of a foreign arbitral award shall attach to its petition the following documents, together with the number of copies of the opposing party:

a) The original or a duly certified copy of the arbitration agreement or clause.

b) The original or duly certified copy of the arbitral award which has been duly finalised and enforceable or binding for the parties.

c) Translated and duly certified copies of the documents listed in subparagraphs (a) and (b).

3. Procedure

Article 61/2 of the IPPL reads as follows: "The provisions of Articles 55, 56 and 57 shall apply by analogy to the enforcement of arbitral awards by the court."

Pursuant to the aforementioned articles, the petition for recognition and enforcement shall be notified to the other party together with the hearing date. The request shall be decided upon the examination to be conducted in accordance with the provisions of the simple trial procedure.

The court shall decide on the partial or full enforcement of the foreign arbitral award or the rejection of the request. The opposing party may only object to the application based on the conditions set forth in Article 62.

The foreign arbitral award shall be enforced in the same manner as Turkish arbitral awards. The appeal of the decisions on the acceptance or rejection of the request for enforcement shall be heard in accordance with the general provisions, and the appeal shall stay the execution of the award.

GROUNDS FOR REFUSAL OF RECOGNITION AND ENFORCEMENT ACCORDING TO ART. 62 IPPL

The court shall refuse the request for enforcement of a foreign arbitral award in the following cases

  1. If no arbitration agreement has been concluded or no arbitration clause has been included in the articles of association,
  2. If the arbitral award is contrary to public morality or public order,
  3. If the dispute subject to the arbitral award cannot be resolved by arbitration under Turkish law,
  4. If one of the parties was not duly represented before the arbitrators and did not expressly accept the proceedings afterwards
  5. If the party against whom enforcement of the award is sought has not been duly notified of the selection of the arbitrator or has been deprived of the opportunity to make a claim and defence,
  6. If the arbitration agreement or clause is void according to the law to which it is subjected by the parties or, if there is no agreement to this effect, according to the law of the country where the arbitral award is rendered,
  7. If the selection of the arbitrators or the procedure applied by the arbitrators is contrary to the agreement of the parties or, in the absence of such an agreement, to the law of the country in which the award was rendered,
  8. If the award relates to a matter not covered by the arbitral agreement or the terms of the arbitral award, or if it exceeds the limits of the agreement or the terms, about this part,
  9. If the arbitral award has not become final or enforceable or binding in accordance with the provisions of the law of the country to which it is subject or in which it was rendered or the procedure to which it is subject, or if it has been annulled by the competent authority of the place where it was rendered,

Of the grounds for refusal listed under this heading, items 1, 2, 3 are investigated ex officio by the judge, while the burden of proof for the matters listed in the other items rests with the party against whom enforcement is sought.

RECOGNITION AND ENFORCEMENT ACCORDING TO IPPL

Upon the Turkish court's favourable decision on the enforcement of the foreign arbitral award, the foreign arbitral award shall become a final judgement and enforceable in Turkey. The enforced foreign arbitral award shall be enforced in the same manner as Turkish arbitral awards. The appeal of the decisions on the acceptance or rejection of the request for enforcement shall be conducted in accordance with the general provisions, and the appeal shall stay the execution of the award.

It is important to note that the rejection decision regarding the recognition and enforcement request, just like the acceptance decision, contains all the consequences of a final judgement. In other words, if recognition and enforcement is requested again against a foreign arbitral award that has already been refused recognition and enforcement once, this request will be rejected.

Of course, in the event that the foreign arbitral award, which has been refused enforcement, is again decided by the arbitrators, the enforcement of this award may be requested since it will be a new arbitral award.

1. Ziya Akinci, International Arbitration, Expanded and Updated 4th Edition, Istanbul, 2016.

2. Ziya Akinci, International Arbitration, Expanded and Updated 4th Edition, Istanbul, 2016.

3. Ihab Amro, Recognation and Enforcement of Foreign Arbitral Awards in Theory and in Practice: A Comparative Study in Common Law and Civil Law Countries, Cambridge Scholars Publishing, 2013, s.40

4. Turgut Kalpsüz, International Arbitration in Turkey, Expanded Second Edition, Ankara, Yetkin Publications, 2010 p.187

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.