Turkey: A Comprehensive Guide To International Arbitration In Turkey: Part VI (The Arbitral Award)

1. Who sends the award to the parties under Turkish arbitration rules? The Arbitrator/ President of the Tribunal or the Arbitral Institution?

According to Article 14 of the Code of International Arbitration (no4686), the arbitral award is sent to the parties by the arbitrator or the chairman of the arbitral tribunal. In ISTAC Rules, the Sole Arbitrator or the Arbitral Tribunal fulfills this task arising from the Code by means of The Secretariat. As Article 36 of the ISTAC Rules states, The Secretariat notifies the parties of the signed award if the arbitration costs have been paid in full by the parties or one of the parties. Upon the parties' request, the Secretariat provides certified copies of the award. No one other than the parties, their representatives, and their counsel may receive a copy of the award.

2. Do partial awards have to be set aside separately or together with the end-award?

The arbitrator or the arbitral tribunal may issue partial awards unless otherwise agreed, as Article 14 of the Code of International Arbitration (no4686) explicitly authorizes. The Article 35/2 of the ISTAC Rules reiterates this power by saying that "Unless otherwise agreed, the Sole Arbitrator or Arbitral Tribunal may render a partial award". As evidenced by the subsequent articles of the aforementioned legislation, the concept of "arbitral award¹" continues to be preferred instead of separating it as partial and final. The term "final award" only appears in Article 13, which governs the ending of arbitration proceedings, just to signify the phases of arbitration rather than indicating a distinction between a partial and final award. For this reason, the Turkish Court of Cassation will focus on and examine only whether the award requested to be set aside is an arbitral decision². If the award is requested to be set aside as an award of the arbitrator or an award of the tribunal, it can be set aside regardless of whether it is partial or final.

3. What is the deadline to set aside an award?

Article 15 of the Code of International Arbitration (no4686) determines the deadline to set aside an award as "within thirty days". According to this provision, an action to set aside an award can be filed within thirty days. This period starts to run from the date when the arbitral award is notified to the parties, or the decision of correction, interpretation, or completion is notified to the parties. As the last sentence of this article orders, the filing of an action to set aside automatically suspends the execution of the arbitral award.

Turkish scholars praise the thirty-day deadline in the Code as it can enable expeditious arbitration proceedings than the UNCITRAL Model Law which stipulates a 3-month period³.

4. May enforcement proceedings start before the deadline to set aside the award has been reached?

Article 15/(B) of the Code of International Arbitration (no4686) specifies the conditions under which an award may be enforced⁴ before the thirty-day deadline. As is evident from Article 15/(B)/1, parties may apply to the Court for a document proving the award's enforceability upon the Court's decision to reject a request to set aside the award. In the event that the decision of rejection is issued before the deadline, parties may rely on the document issued by the court declaring the award's enforceability.

Article 15/B/2 can also show one of the exceptions in which parties can apply to have the document on the award's enforceability before the thirty-day deadline. As it is stated in Article 15/B/2, if parties waive their right to request to set aside the award, they can apply for the document proving the award's enforceability to start enforcement proceedings before the deadline.

5. What are the arbitration fees under the rules of a Turkish arbitration institution for a three-arbitral Tribunal when the Claimant claims10 Million € and the Respondent has a counter-claim for 5 million €?

Article 41 of the ISTAC Rules regulates the arbitration fees and costs. ISTAC also helps with a calculator on their website⁵. Courts and tribunals in Turkey calculate the costs and fees on the Turkish Lira. So as to calculate the costs of a dispute which amounts to 15 Million Euros, we must convert it to Turkish Lira. 15 Million Euro is 310.732.647 Turkish Lira for currency values on 27.03.2023. In conclusion, for a dispute of 310.732.647 TRY, parties will pay 500 TRY (24,14 Euro) as a registration fee; 600.293 TRY (28977 Euro) as administrative costs; and 4.302.831 TRY (207.710 Euro) for the Arbitral Tribunal.

Footnotes

1. In a more accurate translation, it can be mentioned as "the award of the arbitrator or tribunal/hakem veya hakem kurulu kararı" by the preferred legal wording of the legislator.

2. "The legal counsel for the defendant claims that the subject matter of the case is not about an award of the arbitrator or an award of the tribunal... thence, the decision of the Izmir Chamber of Commerce cannot be requested to set aside. Given his client cannot be deemed to have carried the title of defendant in this case, he requested the rejection of the case..." Turkish Court of Cassation (Yargıtay), 11. Civil Law Chamber, 2016/8263/, 2018/1500, 28.02.2018 (27.03.2023, can be accessed in https://karararama.yargitay.gov.tr/)

3. AKINCI, Ziya, Milletlerarası Tahkim, Vedat Kitapçılık, İstanbul, 2020, s. 339.

4. Since the arbitral awards were not enumareted in the Article 38 of the Code of Enforcement and Bankruptcy (no2004), an arbitral award cannot be deemed as having the power of direct enforcement. Turkish Court of Cassation forms its case law on this opinion. For instance; Turkish Court of Cassation (Yargıtay), 12. Civil Law Chamber, 2008/14740, 2008/17801.

5. https://istac.org.tr/en/dispute-resolution/costs-and-fees/calculator/ (27.03.2023)

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.