CCP does not contain any provisions concerning the enforcement of foreign arbitral awards. Turkey did not sign the 1923 Geneva Protocol and the 1927 Geneva Convention (In fact, Article VII, 2. of the New York Convention states that these shall cease to have effect between the parties to the New York Convention.) For this reason, until the Private International Law and Procedure ("PILP") came into force in 1982, the gap caused by the absence of legislation concerning the enforcement of foreign arbitral awards was filled by the decisions of the Court of Appeals.
The provisions of the PILP concerning the enforcement of foreign arbitral awards are similar, in many respects, to the provisions New York Convention. Nevertheless, the PILP has made the enforcement of foreign arbitral awards very similar to the enforcement of foreign court decisions in that it requires (1) satisfaction of the "reciprocity rule" applicable to the enforcement of foreign judgments and (2) foreign arbitral awards must have become enforceable according to the rules of procedure of the country where such arbitral awards were made (double exequatur). It is possible to conclude that, until the entry into force in Turkey of the 1961 Geneva and 1958 New York Conventions, the Turkish legislature viewed arbitration as belonging to procedural law rather than private law.
Although Turkey signed the New York Convention in 1958, it did not ratify the Convention for many years. In addition, enforcement of foreign arbitral awards was subjected to significant barriers in the legal system. Finally, the Geneva Convention was ratified by Law No. 3730 and came into force in Turkey in 1991, and the New York Convention was ratified by Law No. 3731 and came into force in 1992.
Ratification of the New York Convention means that the following essential principles are adopted by the Republic of Turkey:
(a) as a rule, the nationality of an arbitral award is determined by the place of arbitration (Territory Principle);
(b) each contracting state shall recognize arbitral awards (that are deemed foreign by the New York Convention) and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the New York Convention.
The New York Convention has separated, and made independent, the enforcement of foreign arbitral awards from the enforcement of foreign court decisions.
The Geneva Convention of 1961, applicable to the resolution by arbitration of disputes arising out of international commercial acts between natural or legal persons whose places of business are in different countries, contains provisions relating to the organization of arbitration and the way it will be conducted as well as to arbitration agreements, arbitral proceedings and applicable substantive law. Under Article VII of the New York Convention, in any application for enforcement made in accordance with the Convention, the interested parties, especially the party seeking enforcement of the arbitral award, may not be deprived of any right to avail themselves of any provision of the law or the treaties of the country where the action for enforcement is taking place. For this reason, the Geneva Convention may be viewed as the main source that supplements the New York Convention.
The New York Convention has, albeit slowly, started to take its place in the decisions of the Court of Appeals. First, in two decisions dated 1991 and 1992, the Court of Appeals has accepted that the ICC Arbitration Rules, designated by the parties as the procedure applicable to the arbitration, are not contrary to the public policy of Turkey. In several decisions given in 1996, the Court has recognized the applicability of the New York Convention to the enforcement of foreign arbitral awards.
By Dr. Mahmut T. Birsel.
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