Turkey: National Arbitration In The Civil Procedure Code - II

Some provisions of the Civil Procedure Code numbered 6100 ("CPC") regarding arbitration have been analyzed in our previous article. In this article, we shall continue to analyze the relevant provisions and Article 417 and following articles of the CPC.

Withdrawal or Challenge of Arbitrators

Arbitrators, just like judges, play an important role on judicial activity. Therefore, impartiality and independence of arbitrators are of importance in arbitral proceedings. Pursuant to Article 417/1 of the CPC, the arbitrator shall disclose any circumstances likely to give rise to justifiable doubts as to his or her impartiality or independence. In the event such circumstance occurs later, the arbitrator shall without delay disclose any such circumstances to the parties.

Pursuant to Article 417/2 of the CPC, the challenge of arbitrators is possible only in the event an arbitrator does not have the qualifications agreed upon by the parties, in the presence of a reason for challenge agreed in the arbitration procedures by the parties or if circumstances exist that give rise to justifiable doubts as to the arbitrator's impartiality or independence.

Article 418 regulates in detail the procedure of challenge of arbitrators. The parties may freely agree on the procedure of challenge of arbitrators. A party that intends to challenge an arbitrator shall send notice of its challenge within two weeks following the appointment of the challenged arbitrator, or within two weeks after the circumstances giving rise to challenge became known to the party, and shall inform the other party of its challenge in writing. In the event that the arbitrator does not withdraw or the other party does not agree to the challenge, the arbitral tribunal shall decide on the challenge.

The liability of arbitrators is regulated under Article 419 of the CPC. Unless agreed otherwise by the parties, in the event that the arbitrator who accepted the office in the arbitral proceeding fails to fulfill the task in the absence of a valid reason, he shall compensate the damages of the parties. It is seen that the relevant provision limits the liability of arbitrators.

Filing of the Case and Proceedings

Provisions concerning filing of the case and proceedings are laid down under Article 423 and following articles of the CPC. Article 423 regulates the two essential principles that govern the arbitral proceedings. These principles are equal rights and authorities of parties and legal right to hearing. The parties may, in principle, freely agree on the procedural rules to be applied to arbitral proceedings, however, contrary regulations to these principles may not be adopted and the arbitrators shall comply with these principles as well.

The parties may freely determine the procedural rules to be applied by the arbitrators, without prejudice to the compulsory provisions under the arbitration section of the CPC. In the event that the parties do not determine the said rules, the arbitration shall be conducted by the arbitrators by taking into consideration the arbitration related provisions of the CPC.

Pursuant to Article 425 of the CPC, the place of arbitration shall be freely determined by the parties or by an arbitration institution agreed by the parties. If the parties have not previously agreed on the place of arbitration, the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case. The arbitral tribunal may meet at any location other than the place of arbitration and may conduct procedural actions, under condition to previously notify the parties.

Article 426 of the CPC sets forth different provisions regarding the date of filing of the case in arbitration, for different scenarios. Pursuant to this article, the arbitration case shall be considered to be initiated with the application to the tribunal for the appointment of arbitrators, or to the person, institution or organization who shall appoint the arbitrators, or in the event that the arbitrators shall be appointed by both parties pursuant to the agreement, the arbitration case shall be considered to be initiated with the appointment and notification of an arbitrator by the claimant to the other party. Additionally, in the event that the names and surnames of the arbitrators are specified in the arbitration agreement, the arbitration case shall be considered to be initiated as soon as the request for arbitration is received by the other party. Pursuant to the second paragraph of this article, in case one of the parties has obtained a decision on provisional injunction or provisional seizure, the arbitration proceedings shall be initiated within two weeks, otherwise the decision on provisional injunction or provisional seizure shall be lifted automatically. As the said decisions are provisional, the proceedings shall be initiated within this short period of time.

The fact that arbitration is a rapid dispute resolution process finds its reflections on Article 427 of the CPC. Unless agreed otherwise by the parties, the arbitrators shall decide on the merits of the case, in cases where a sole arbitrator is in charge, within one year as from the appointment of the arbitrator; and in cases where several arbitrators are in charge, within one year as from the date of drafting of the first minutes of meeting by the arbitrators. This time period may be extended with the agreement of parties, and if the parties fail to agree, with the decision of the courts.

Statement of claim and statement of defense shall be submitted within the time period agreed by the parties or determined by the arbitrator. Unless agreed otherwise by the parties, the claims or defenses may be amended or supplemented. The arbitrators may refuse this amendment or supplementation in case it may be considered inappropriate to allow such amendment or supplement having regard to the delay in making it or prejudice to other parties in an unfair manner or any other circumstances. Therefore, the efforts aiming to extend arbitral proceedings may be prevented. Pursuant to Article 429 of the CPC, arbitrators may decide that the proceedings would be held based on file or by holding hearings.

In the event that the claimant does not submit its statement of claim in due time without providing a valid reason, in case the statement of claim is not in due form and the deficiencies are not fulfilled in the cure period granted, arbitration proceedings shall be ended pursuant to Article 430/1-a of the CPC. In case that the respondent fails to submit the statement of defense, this would not be considered as acknowledgement or acceptance of case and the proceedings shall proceed.

Pursuant to Article 431, arbitrators may decide to appoint experts to report on the issues determined by the tribunal, and that the parties shall make necessary explanations and produce relevant documents to the experts, and to hold viewings. Experts may participate to the hearing after submitting their reports upon request of one of the parties or in case the arbitrators deem it necessary. At this hearing, any party may interrogate the experts and present expert witnesses in order to testify on the points at issue. Pursuant to Article 432 of the CPC, any of the parties may request the assistance of the courts for the collection of evidence with the approval of arbitrators.

Closing of the Proceedings and Arbitral Award

Article 435 of the CPC regulates the closing of the arbitration proceedings. The proceedings shall be closed upon the final arbitral award or in case one of the circumstances listed in the relevant article occur. Pursuant to Article 433 of the CPC, unless agreed otherwise by the parties, the arbitrators may decide with the majority of votes. The chairman may decide solely on the procedural matters if the parties or the other arbitrators authorize the chairman.

The arbitral tribunal shall decide as amiable compositeur or ex aequo et bono only if the parties have expressly authorized the arbitral tribunal on the relevant matter.

In case of settlement of the parties in the course of arbitration proceedings, the proceedings shall be closed pursuant to Article 434 of the CPC. In case the parties' request is in compliance with morals or public order, or in a subject that may is arbitrable, the settlement shall be determined as an arbitral award.

Article 436 of the CPC governs the elements that are required to be included in the arbitral award. Legal grounds on which the award is based and the justification, the rights and obligations attributed to parties under a sequence number specified clearly and conclusively and arbitration costs and the possibility to initiate an action for annulment are among the important elements that shall be included in the arbitral award.

Pursuant to Article 437, unless a different time period is determined, the parties may, within two weeks after the receipt of the arbitral award, request the correction of any error in computation, any clerical or typographical error, or any error of a similar nature, or the interpretation of a certain issue of part of the arbitral award.

Arbitration Costs

The arbitration costs include the costs listed under Article 441 of the CPC. Pursuant to Article 442/1 of the CPC, the arbitrators may request an advance payment from the parties for the costs of arbitration if necessary. Unless agreed otherwise, the advance payment shall be equally borne by the parties. Unless the parties agree otherwise, the costs shall be borne by the unsuccessful party. In the event each party is partially successful, the costs shall be allocated to parties in accordance with the success of the parties. Costs of arbitration shall be specified in the award that closes the arbitral proceedings or that determines the settlement of the parties.

Right to Appeal Against the Arbitral Award

The only right to appeal against an arbitral award is the action for annulment and it is regulated under Article 439 of the CPC. The action for annulment shall be initiated in the court located at the place of arbitration and shall be primarily and urgently tried by the court. The grounds for an annulment are limited to the grounds listed under the second paragraph of the relevant article. In line with the nature of arbitration as a way of dispute resolution, whether the arbitrators duly applied legal provisions or not shall not be discussed in the action for annulment. The action for annulment shall be initiated within one month and unless the relevant court decides otherwise, shall be tried based on file.

The decisions rendered, following an action for annulment may be subject to appeal. The appeal shall be limited to the grounds for annulment listed in the relevant article, and shall be primarily and urgently decided by the court. The appeal shall not suspend the execution of the award.

Pursuant to Article 443 of the CPC, provisions on the new trial which is an extraordinary legal remedy shall be applied, as long as they are suitable for the arbitration.

Conclusion

The provisions of the CPC governing arbitration aim at independent, impartial and accelerated proceedings, by taking current arbitration practices into consideration. The fact that the grounds for annulment of arbitral awards are limited increases confidence to arbitral awards.

Even though the provisions of the CPC are greatly influenced by the International Arbitration Act numbered 4686 ("IAA"), CPC does not regulate the terms of reference, unlike the IAA, which may be criticized. The terms of reference are of great importance since it confirms the arbitration agreement between the parties on one hand, and on the other hand, it reflects the agreement of the parties as per the issues regarding the procedure to be followed in arbitration proceedings.

As indicated in our previous article, given the material similarities between the IAA and the CPC, it would be appropriate to regulate the national and international arbitration by summoning the provisions in one code, in order to overcome discrepancies with respect to the scope of application of the relevant laws.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Erdem & Erdem Law
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Erdem & Erdem Law
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions