Enforcement of foreign arbitral awards has been a matter of discussion in many jurisdictions including Turkey. This article is designed for providing a brief outline about judicial perception for enforcement of foreign arbitral awards in Turkey.
For our work and all legal services on the matter of dispute resolution, please click our "Practice Areas", titled, Dispute Resolution and Litigation.
Introduction
It is notable at the outset that arbitration offers a significant opportunity for peaceful settlement of disputes. There are several arbitration centers dealing with dispute settlement within and outside Turkey. International arbitration lawyers and practitioners make a significant contribution to all parties across the world.
For a comprehensive evaluation of the role of arbitration in dispute settlement take a look at our article on Arbitration Process
What are 4 types of alternative dispute resolution?
In general, the word alternative dispute resolution implies a different instrument to end a dispute without any trial. refers to the different ways people can resolve disputes without a trial. Main types of alternative dispute resolution cover arbitration, mediation, negotiation.
For a useful observation about the mechanism of the United Nations Convention on International Settlement Agreements Resulting from Mediation, our article on A Brief Analysis of the Singapore Convention is available online here.
The word "arbitral award" implies a decision by arbitrator(s), arbitral tribunal or an international arbitration center authorized by parties in advance for dispute settlement based on a final and binding decision. There are a wide range of arbitration mechanisms across the world.
For instance, the Dubai International Arbitration Centre presents a milestone for a trending dispute resolution mechanism for particularly Middle East countries.
arbitration mechanisms
How enforcement of foreign arbitral awards in Turkey is possible?
Under Article 60 of the Law on Private International and Procedural Law (Numbered 5718), final foreign arbitral awards may be recognized and enforced. The enforcement of a foreign arbitral award in Turkey shall be requested by a petition from the Court of First Instance mutually designated by the parties in writing. In the absence of such agreement, the competent court shall be the court at the domicile of the person in Turkey against whom the award is rendered, or in the absence of domicile, the person's place of habitual residence, and in the absence thereof, the court at the location of the property that may be subject to execution.
For more analysis see our article on Enforcement of Foreign Arbitral Awards
What is the case-law of Turkish judicial bodies on the enforcement of foreign arbitral awards in Turkey?
Article 62 identifies the rejection reasons for the request about enforcement of foreign arbitral awards in Turkey for the following reasons:
- a) An arbitration agreement is not executed, or arbitration clause does not exist in the main agreement,
- b) The arbitral award is contrary to public morality or public order,
- c) It is not possible to settle the dispute subject to the arbitral award by way of arbitration under Turkish law,
ç) One of the parties has not been duly represented before the arbitrators and has not expressly accepted the acts concluded thereafter,
- d) The party against whom the enforcement of the arbitral award is requested has not been duly notified of the appointment of arbitrators or has been deprived of his/her right to make claim and defense,
- e) The arbitration agreement or clause is invalid pursuant to the governing law designated by the parties, or in the absence thereof, pursuant to the law of the place where the arbitral award is rendered,
- f) The appointment of the arbitrators or the procedure applied by the arbitrators violates the agreement of the parties, or in the absence thereof, the law of state where the arbitral award is rendered,
- g) The arbitral award has been rendered on an issue that is not included in the arbitration agreement or arbitration clause or exceeds the limits of the agreement or the clause (only the exceeding part),
- h) The arbitral award is not final, enforceable, or binding under the governing law or the governing procedure or the law of state where it was rendered, or it is annulled by the competent authority in the place where the award is rendered.
Therefore, it is helpful to observe that judicial review will cover a full-fledged examination of the existence or lack of the above-mentioned reasons. In this context, the judgment of a supreme judicial authority presents a very good sample for a judicial perception with regard to the enforcement of foreign arbitral awards in Turkey. Under that judgment (Judgment by Istanbul Appellate Court 14th Chamber on 17 September 2020 [E. 2018/2196, K.2020/917], following criteria must be controlled by a judicial review for enforcement of foreign arbitral awards in Turkey:
- The fact that the arbitration rules are applicable to any dispute between parties must be accepted in accordance with the contract between parties,
- The final award must be given by the arbitrator after review and fair trial within the framework of the representation of all parties,
- The dispute must be suitable for arbitration in terms of Turkish law,
- The evaluation of these defense claims was included in the final award,
- The addressee company was present at every stage of the proceedings at the Arbitration Center,
- The defense arguments must be taken properly during the arbitration proceedings,
Conclusion
In conclusion, the recognition and enforcement of foreign arbitral awards is recognized in the Turkish legal framework. According to the established case-law of the Supreme Judicial Authorities, the recognition judgment requires significant conditions. Understanding and analyzing all necessities has a vital impact upon arriving at a positive outcome for any application.
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.
