1. What is the role of an arbitration institution in Turkey in the appointment of arbitrators?

The most important arbitration institution in Turkey is the Istanbul Arbitration Centre (İstanbul Tahkim Merkezi/ISTAC) which is promoted by the Office of Finance of the Presidency of the Republic of Turkey1. ISTAC was established in 2015 as an independent, impartial, and autonomous institution. By ISTAC Arbitration and Mediation Rules2 Article 1.2., The Board of Arbitration has been created as an autonomous body of the ISTAC. The Board does not solve the disputes itself but administrates the determination and application of the rules for arbitration, and the resolution of the disputes either by a sole arbitrator or an arbitral tribunal. Article 1.2. has similarly established the Secretariat which is responsible for assisting the Board.

ISTAC Arbitration and Mediation Rules about the appointment of arbitrators begin with an emphasis on the impartiality and independence of the arbitrators3. Besides, arbitrators bear the duty to disclose any facts or circumstances which may give rise to justifiable doubts as to their impartiality and independence4. As can be seen in using the same phrases such as "justifiable doubts", the IBA Guideline clearly sets a precedent for the ISTAC rules.

The Board also decides by taking into all facts and circumstances, if the parties could not agree on this issue, whether the dispute will be resolved by a sole arbitrator or by an arbitral tribunal. Therefore, according to Article 13.2., The Board is authorized to form the arbitral tribunal as well. Likewise, the Board has the authority to appoint the sole arbitrator if the parties fail to choose one, and in cases where the dispute is to be solved by an arbitral tribunal and one of the parties fails to choose an arbitrator, the Board appoints the arbitrator. In a situation where the two co-arbitrators fail to designate the third arbitrator, the Board appoints the third arbitrator. All of these procedures must be carried out in the light of the principles of Article 15 which says that The Board must consider the time availability and necessary abilities of the prospective arbitrator, as well as any circumstances that may affect the arbitrator's impartiality and independence.

  1. Do the arbitration proceedings come to a standstill while an arbitrator is being challenged or do the proceedings continue under an arbitration institution in Turkey?

According to Article 7/3(D) of the Code of International Arbitration, the parties may freely decide on the procedure for refusal of the arbitrator. As can be understood from this legal wording, the parties may agree to stop the proceedings if an arbitrator is being challenged. However, the Code of International Arbitration does not contain a direct rule regarding the stay of the proceedings due to a challenge. On the other hand, in accordance with Article 7/3 (D), the party seeking to have one or more arbitrators removed from the arbitral tribunal must provide the tribunal with a request for rejection and a justification. The party who learns that the rejection request was denied may appeal the decision to the civil court of the seat within thirty days of this date, requesting the annulment of this decision and the rejection of the arbitrator(s). Arbitration can be terminated if the court decides to dismiss all elected arbitrators, the arbitral tribunal, or a majority of arbitrators.

ISTAC rules also contain no provision to halt arbitration proceedings in the event of a challenge of arbitrator. Article 16 of the ISTAC rules lays out the procedure for the challenge of arbitrators if an arbitrator does not possess the qualifications agreed upon by the parties, if there are circumstances and facts that raise doubts on her/his impartiality and independence, or if there are other reasons that prevent the arbitrator from performing his/her duties. The party initiating the procedure for challenge of arbitrators must give a written statement to the Secretariat including the explanation of the facts and circumstances on which the challenge based. This written statement must be given in thirty days from the appointment or choose of this arbitrator or from the time of learning the facts and circumstances which give rise doubts about his/her impartiality or/and independence. The Secretariat notifies the opposing party, sole arbitrator, or arbitral tribunal of the challenge to the arbitrator and gives them 15 days to submit written comments. The Board is authorized to approve the request and make a decision. If the Board accepts the request, the arbitrator's duties end.

  1. Is "consolidation of arbitration proceedings" regulated by ISTAC arbitration statute and/or by the rules of ISTAC? What is meant by "consolidation"?

The procedure by which two or more separate arbitration proceedings that are currently pending, by order of authority in this situation, are joined together and tried together at the same time is referred to as consolidation of arbitration proceedings. The consolidation of arbitration proceedings was not regulated by the Code of International Arbitration but ISTAC Arbitration and Mediation Rules contains specific regulations for this issue under Article 11. According to this, The Board may consolidate two or more pending arbitrations into a single arbitration at the request of any party. The request of any party is the trigger of the consolidation procedure. The consolidation request must be submitted to the Secretariat by any party. After consulting with all parties, the Secretariat transmits the request for consolidation to the Board. If the Board decides to consolidate, the arbitrations shall be merged into the first-to-begin arbitration, unless all parties agree otherwise5.

The Board is not free to act in deciding on consolidation, certain conditions must be met. As it is stated by Article 11/1(a), if the parties to the arbitrations which are requested to be consolidated are different, all parties must have agreed to the consolidation. If the parties to the arbitrations are the same, one of these three conditions must be fulfilled: i) the parties must agree on consolidation, ii) all of the claims in the arbitrations must be based on the same arbitration agreement, iii) If the claims in the arbitrations are based on more than one arbitration agreement, the disputes in the arbitrations must arise in connection with the same legal relationship and the arbitration agreements must be compatible6.

Footnotes

1. https://www.cbfo.gov.tr/en/licensing-organization/istanbul-arbitration-centre

2. https://istac.org.tr/wp-content/uploads/2016/03/istac_tahkim_kurallari_v3_EN.pdf

3. Article 12.1, 1. "Every arbitrator must be impartial and independent and they must remain impartial and independent until the proceedings come to an end."

4. Article 12.3., "Both prior to accepting the duty and in the course of the arbitration proceedings, the arbitrator must disclose in writing to the Secretariat any facts or circumstances which might have an influence on their impartiality and independence, as well as any facts or circumstances which may give rise to justifiable doubts as to their impartiality and independence"

5. See Article 13.3.

6. See Article 11/1(b)

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