This article is dedicated to the memory of the late Serge Lazareff, honoured for his distinguished contribution to international arbitration.

Introduction

In Turkey, the attitudes of businesses towards alternative dispute resolution differ depending on their size. While large firms generally favour arbitration, small and medium-sized enterprises usually prefer litigation, probably due to their being insufficiently informed about the merits of out-of-court settlements. Neither are accustomed to using mediation, and the practice of mediation by non-jurists is traditionally discouraged by Turkish lawyers and Bar associations.1

Between 1927 and 2001, arbitration was regulated by Articles 516-536 of the Code of Civil Procedure (hereinafter 'old CCP or '1927 CCP').2 These provisions covered both domestic and international arbitration. In 2001, a statute specifically devoted to international arbitration was adopted, which we shall refer to hereinafter as the Act on International Arbitration, or AIA.3 This statute was based mainly on the 1985 UNCITRAL Model Law on International Commercial Arbitration (hereinafter 'Model Law') and partly on the 1998 ICC Rules of Arbitration (hereinafter 'ICC Rules') and the Swiss Federal Statute on Private International Law (hereinafter 'Swiss PIL Statute'). Domestic arbitration, meanwhile, remained subject to the old CCP. In 2011, the 1927 CCP was replaced by a new Code of Civil Procedure, (hereinafter 'CCP' or '2011 CCP')4, which entered into force on 1 October 2011. Chapter 11 of the CCP, consisting of Articles 407-444, currently regulates domestic arbitration in Turkey.

Arbitration is mandatory in Turkey for certain kinds of disputes which are regulated in various specific laws. They include disputes between administrations and municipalities5, disputes relating to the transfer of securities,6 labour disputes related to collective bargaining,7 and low-value consumer law disputes (objections may be raised against such arbitral awards before the Consumer Courts (Tüketici Mahkemesi))8.

Institutional arbitration has been in use in Turkey since 1980. Institutional rules chosen by parties include those of the Istanbul Chamber of Commerce (ITO), the Izmir Chamber of Commerce, the Turkish Union of Chambers of Commerce and Chambers of Exchanges (TOBB) and, of course, the ICC. As yet, Turkey has no nationwide arbitration centre for domestic and international disputes. One of the authors of this article has been involved in drafting rules for an arbitration centre under the aegis of the Istanbul Chamber of Commerce, but the project has met with opposition from the Ankara-based TOBB. The Turkish Ministry of Justice is currently preparing a draft law on an Istanbul arbitration centre as part of a project for the Istanbul International Financial Centre. In the meantime, the ICC Rules are being used with increasing frequency in both international and domestic disputes, as reflected in the rising number of cases involving Turkish parties and/or seated in Turkey filed with the ICC International Court of Arbitration9.

Where parties have not chosen institutional rules or these rules are silent, Turkey's arbitration statutes will apply. It is therefore of interest to examine the state of statutory law following the adoption of the 2011 CCP. This latest development in Turkey's arbitration legislation, while remaining close to the AIA and the UNCITRAL Model Law, also contains some significant differences, some of which show how arbitration in Turkey is being brought up to speed and may point the way ahead for further similar developments in international arbitration.

Turkish statutory law on international and domestic arbitration

When enacting the AIA in 2001, Turkey took its lead from the Model Law. The 2011 CCP contains rules very similar to the AIA and the Model Law, but also contains a few significant differences relating to domestic arbitration, which will emerge in the course of this article. Although several of the provisions in the CCP are not worded exactly as in the AIA, their legal effect can be regarded as similar.

Each set of rules-the AIA on international arbitration and Chapter 11 of the CCP on domestic arbitration-are presented as self-contained and exclusive. Therefore, any provisions from other sources, which may seem useful in arbitration, may apply only if the AIA or Chapter 11 of the CCP makes an explicit reference thereto (AIA, Art. 17/I;10 CCP, Art. 444). This means that no provisions of the CCP are applicable in international arbitration unless the AIA explicitly says so, and no provisions of the CCP other than those in Chapter 11 are applicable to domestic arbitration unless explicitly stated in Chapter 11 of the CCP.

Although the wisdom of having two sets of very similar legislative rules is questionable, one positive effect they might have, as mentioned above, is that improvements made only in one law may make way for further improvements in the other law.

The AIA is composed of seven Chapters and contains 19 relatively long Articles. Although its wording closely follows the Model Law, the order of its provisions differs from that of the Model Law. It is broken down into the following chapters: general provisions (Articles 1-3); arbitration agreement (Articles 4-6); appointment of arbitrators, composition of arbitral tribunal, challenge and replacement of arbitrators, arbitrators' liability, termination of duties, arbitrators' jurisdiction (Article 7); conduct of arbitration proceedings (Articles 8-14); recourse against arbitral awards (Article 15); costs of arbitration (Article 16); final provisions (Articles 17-19).

Chapter 11 of the CCP contains 38 relatively short Articles. Its provisions are mostly copied from the AIA, sometimes with modifications. They may be broken down as follows:

general provisions (Articles 407-411); arbitration agreement, interim measures and collection of evidence (Articles 412-414); appointment of arbitrator and composition of arbitral tribunal, challenge and replacement of arbitrators, their liability and jurisdiction (Articles 415-422); conduct of arbitration proceedings (Articles 423-436, 438, 444); recourse against arbitral awards (Articles 437, 439, 443); costs of arbitration (Articles 440-442).

Provision-by-provision analysis of Turkish arbitration statutes

In the following analysis, for the convenience of non-Turkish readers, the provisions of the AIA and the CCP will be examined in the order followed in the Model Law, not in the order in which they appear in the Turkish statutes.

A. General provisions (AIA, Arts. 1-3; Model Law, Arts. 1-6)

Chapter I of the Model Law, entitled 'general provisions', covers the scope of its application, definitions and rules of interpretation, receipt of written communications, waiver of the right to object, and related issues. Several of these provisions have been adopted in Articles 1-3 of the AIA.

1. Scope of application (AIA, Art. 1; CCP, Art. 407; Model Law, Art. 1)

Article 1 of the AIA corresponds roughly to Article 1 of the Model Law.

The AIA applies to arbitrations containing a 'foreign element' (yabancilik unsuru) which are either seated in Turkey or in which the AIA has been chosen by the parties or the arbitral tribunal as applicable (AIA, Art. 1/II).

The AIA also applies to objections to arbitration made in state courts, arbitration agreements made during state court proceedings (AIA, Art. 5) and interim measures (ihtiyati tedbir) and attachments ( ihtiyati haciz) (AIA, Art. 6) in cases seated both within and outside Turkey.

The following are regarded as foreign elements causing the arbitration to be international and leading to the application of the AIA:

- the domiciles, habitual residences or places of business of the parties to the arbitration agreement are situated in different states;

- the domiciles, habitual residences or places of business of the parties are situated in a state other than (i) the place of arbitration specified in or pursuant to the arbitration agreement, (ii) the place where a substantial part of the obligations in the main contract are to be performed, or (iii) the place with which the subject matter of the dispute is most closely connected (AIA, Art. 2/2; cf. Model Law, Art. 1(3)(b));

- at least one of the partners of a company that is a party to the main contract to which the arbitration agreement relates has invested foreign capital under the legislation for encouragement of foreign investment11 (AIA, Art 2/3);

- loan and/or guarantee agreements are required in order to obtain foreign capital for the implementation of the main contract (cf. Foreign Direct Investments Law, Art. 3/e; AIA, Art. 2/3);

- the main contract or legal relationship to which the arbitration agreement relates is aimed at transferring capital or goods from one state to another (AIA, Art. 2/4);

- disputes arising out of concession covenants and agreements related to public services in which there is a foreign element12 (AIA, Art. 1/V). [Page18:]

The above list shows that the Turkish legislator, eager to reassure potential foreign investors, has been generous in setting criteria for determining whether or not a dispute contains a foreign element.

Application of the AIA may be restricted by international treaties to which Turkey is a party and which, under Art. 90/V of the Turkish Constitution (Anayasa), are deemed to be part of Turkish law. The provisions of such treaties that differ from those of the AIA will prevail over the AIA (AIA, Art. 1/VI). International conventions to which Turkey is a party include the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the 1961 (Geneva) European Convention on International Commercial Arbitration, the International Convention on Settlement of Investment Disputes between States and Nationals of Other States (ICSID), the Multinational Investment Guarantee Agency Agreement (MIGA) and the Energy Charter Treaty and Energy Charter Protocol on Energy Efficiency and Related Environmental Aspects (PEEREA). Turkey is also a party to several bilateral treaties (Ikili Yatirim Anlasmalari) on the protection and promotion of foreign direct investments, which generally refer the settlement of any dispute between the Turkish State or its agencies and the foreign investor to arbitration (e.g. ICSID Rules, UNCITRAL Arbitration Rules, ICC Rules of Arbitration, Stockholm Arbitration Rules)13. Furthermore, Turkey is also a member of the World Trade Organization (WTO), which has its own Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU).

The CCP is applicable to disputes without any foreign element as defined in the AIA and where Turkey is the place of arbitration (CCP, Art. 407).

Disputes to which neither the AIA nor the CCP apply are those relating to rights n rem i in immovable property located in Turkey (AIA, Art. 1/IV; CCP, Art. 408) and matters that are not subject to the will of the two parties (AIA, Art. 1/IV; CCP, Art. 408).14

2. Definitions and rules of interpretation (Model Law, Art. 2)

No list of definitions and rules of interpretation exists in either the AIA or the CCP.

3. Receipt of written communications (AIA, Art. 14/C; CCP, Art. 438; Model Law, Art. 3)

Under the AIA (Art. 14/C), unless otherwise agreed by the parties, any written communication is deemed to have been received if it is delivered (i) to the addressee personally or (ii) to the addressee's domicile, habitual residence, place of business or mailing address.

If none of these can be found after making a reasonable inquiry, a written communication is deemed to have been received if it is sent to the addressee's last-known domicile, habitual residence, place of business or mailing address by registered letter or any other means that provides a record of the attempt to have it delivered.

The above provisions of the AIA are relatively flexible and do not apply to communications made in proceedings before state courts, which have more formal and strict requirements.

The CCP does not lay down any specific rules regarding written communications for domestic arbitration. The Turkish law on written communications15 will therefore apply unless the parties have chosen to apply other rules for this purpose.

4. Waiver of right to object (CCP, Art. 409; Model Law, Art. 4)

No provision is made in the AIA for waiving the right to object to the initiation of arbitration proceedings in a case pending before an arbitral tribunal. The CCP, on the other hand, does contain such a provision: in the event of a breach of a non-mandatory provision of the CCP or the arbitration agreement, the other party may raise an objection within two weeks after it becomes aware of such breach or within the period set by the arbitrators for this purpose. If the parties continue with the arbitral proceeding without raising such objection in due time, they will be deemed to have waived their rights to object (CCP, Art. 409). [Page19:]

5. Extent of court intervention (AIA, Art. 3/II; CCP, Arts. 411, 444; Model Law, Art. 5)

Here, the AIA is based on the Model Law: state courts can intervene in matters relating to an international arbitration only in accordance with the provisions of the AIA. The effect of this Article, together with Article 17/I of the AIA, is to forestall the (surprise) application of practices followed in the civil courts pursuant to the CCP, unless such practices are explicitly permitted by the AIA.

In domestic arbitration, state courts can lend assistance insofar as this is specifically permitted in Chapter 11 of the CCP (CCP, Art. 411). This principle is reiterated in Article 444 of the CCP, which states that no other Article of the CCP shall be applicable to matters regulated by Chapter 11 unless that Chapter explicitly states otherwise.

6. Identification of court empowered to intervene (AIA, Art. 3/I; CCP, Art 410; Model Law, Art. 6)

The court empowered to intervene is the civil court of general jurisdiction (Asliye Hukuk Mahkemesi). This is a local court of first instance. Territorial jurisdiction will lie with the court at the respondent's place of domicile or habitual residence or place of business. If none of these is situated in Turkey, the Istanbul civil court of general jurisdiction will have jurisdiction (AIA, Art. 3/I).

In domestic arbitration, pursuant to Article 410 of the CCP, jurisdiction lies with the district civil courts (bölge adliye mahkemesi). If the place of arbitration has not been determined, the respondent's domicile, place of residence or place of business will be taken into account to determine the court with territorial jurisdiction.

District civil courts will shortly become operational soon as the second level of the newly established three-tier court system.

B. Arbitration agreement (AIA, Art. 4/I-IV; CCP, Art. 412/1-4; Model Law, Arts. 7-9)

1. Definition

Chapter II of the Model Law regulates several issues related to the arbitration agreement. Largely similar provisions can be found in the AIA and the CCP.

An arbitration agreement is defined as an agreement by the parties to submit to arbitration all or certain disputes that have arisen or may arise between them with respect to a legal relationship, whether contractual or not (AIA, Art. 4/I; CCP, Art. 412/1). It may take the form of a clause in the main contract or a separate agreement (AIA, Art. 4/I; CCP, Art. 412/2)16.

2. Form of the arbitration agreement

Like the Model Law, the AIA and the CCP require the arbitration agreement to be in writing. An arbitration agreement is in written form if it is contained in a document signed by the parties. Exchanges of letters, telexes, telegrams, facsimiles and similar means of telecommunication, as well as electronically kept records of the arbitration agreement, are considered to satisfy the writing requirement, as does reference to a document containing an arbitration clause with the intention of making such document a part of the main contract (AIA, Art. 4/II; CCP, Art. 412/3). A written arbitration agreement is also held to exist where the respondent has not objected in its statement of defence to the claimant's assertion in its request for arbitration that an arbitration agreement exists (AIA, Art. 4/II; CCP, Art. 412/3)17.

3. Validity of the arbitration agreement

This issue is not specifically covered in the Model Law. Under Article 4/III of the AIA, an arbitration agreement is valid if it complies with the law chosen by the parties as applicable to it. If they have not made such a choice, it will be subject to Turkish law, excluding its rules on conflict of laws. The arbitration agreement cannot be challenged on the grounds that the main contract is not valid or that the arbitration agreement deals with a dispute which has not yet arisen (AIA, Art. 4/IV; CCP, Art. 412/4). [Page20:]

C. Arbitration and substantive claim before court (AIA, Art. 5/I; CCP, Arts. 412, 413; Model Law, Art. 8)

A provision largely equivalent to Article 8(1) of the Model Law is found in the AIA and the CCP, but they do not contain a provision equivalent to Article 8(2) of the Model Law.

1. Objection by way of a plea for arbitration

If a lawsuit relating to a dispute covered by an arbitration agreement is initiated in a state court, Article 5/I of the AIA and Article 413/1 of the CCP allow the respondent to object to the jurisdiction of the state court by pleading arbitration. Articles 116 and following of the CCP relating to preliminary objections will apply to such an objection. The same provisions also apply to the settlement of disputes over the validity of the arbitration agreement. If the state court accepts the respondent's contention that the court proceedings have been initiated in defiance of a valid arbitration agreement or clause, it rejects the case on procedural grounds.

2. Arbitral proceedings during a case pending in a state court

This situation, covered in Article 8(2) of the Model Law, is not specifically covered in the AIA. The CCP, on the other hand, states that an objection to the jurisdiction of the court based on the existence of an arbitration agreement does not prevent the arbitration proceedings from commencing (Art. 413/2).

3. Agreement to arbitrate made during court proceedings

The AIA and the CCP provide that when parties engaged in a lawsuit in a state court agree to settle their dispute by arbitration, the court transfers the case file to the relevant arbitrator or arbitral tribunal (AIA, Art. 5/II; CCP, Art. 412/5).

D. Arbitration agreement and interim measures by court (AIA, Art. 6; CCP, Art. 414/4-5; Model Law, Art. 9)

Before or during arbitration proceedings, a party may request a state court to order interim measures or an interim attachment. Such requests are not deemed incompatible with the arbitration agreement. According to Article 6/I of the AIA, parties may apply to state courts for interim measures despite an arbitration agreement, and the courts may grant such measures, whereas under Article 413/3 of the CCP the use of this power is relatively limited.

Furthermore, Article 6/IV of the AIA reserves the rights of the parties to request interim measures under the CCP and interim attachments under the Code of Enforcement and Bankruptcy18. In international arbitration, therefore, parties can avail themselves of the long-established protective and provisional measures used by state courts. Again, although not explicitly stated in the CCP, this can also be considered to be the case in domestic arbitration, at least with respect to interim measures granted by the courts prior to the initiation of arbitral proceedings (CCP, Art. 414/4).

In domestic arbitration, a party may also bring an application in court when the arbitrators or a mutually appointed third party is unable to grant interim measures or order the collection of in due time or effectively. However, where no such risk exists, an application to the court is possible only if permitted by the arbitrators or agreed in writing by the parties (CCP, Art. 414/3).

Finally, and again only in domestic arbitration, an interim measure granted by a court may be altered or annulled by the arbitrators (CCP, Art. 414/5).

E. Composition of the arbitral tribunal (AIA, Art. 7; CCP, Arts. 415-422; Model Law, Arts. 10-15)

Both the AIA and the CCP contain provisions similar to those of Chapter III of the Model Law relating to the number, appointment and challenge of arbitrators, the challenge procedure, failure or impossibility to act, and the appointment of substitute arbitrators. [Page21:]

1. Number of arbitrators (AIA, Art. 7/A; CCP, Art. 415; Model Law, Art. 10)

The AIA and the CCP leave the parties free to determine the number of arbitrators. There must be an odd number of arbitrators and if the parties do not specify how many, there will be three arbitrators.

2. Appointment of arbitrators (AIA, Art 7/B; CCP, Art. 416/I; Model Law, Art. 11)

The AIA and the CCP are closely based on Article 11 of the Model Law. Unless the parties have otherwise agreed, the following rules apply to the appointment of arbitrators:

(a) Only natural persons can be appointed as arbitrators (AIA, Art. 7/B/1, CCP, Art. 416/1/a). In cases with more than one arbitrator, the CCP (but not the AIA) requires at least one of them to be a lawyer with at least five years' experience (CCP, Art. 416/1/d).

(b) If a sole arbitrator is to be appointed and the parties cannot agree on their choice, the arbitrator will be appointed by the civil court of general jurisdiction at the request of one of the parties (AIA, Art. 7/B/2; CCP, Art. 416/1/b).

(c) In an arbitration with three arbitrators, each party appoints an arbitrator and the two arbitrators so appointed appoint the third arbitrator.

(d) If a party fails to appoint its arbitrator within 30 days (or one month in the CCP) of being asked to do so by the other party, the arbitrator will be appointed by the court (civil court of general jurisdiction in international arbitration, district civil court in domestic arbitration) at the request of the other party. The same procedure applies if the two arbitrators appointed by the parties fail to agree within 30 days (or one month in the CCP) of being appointed on their choice of a third arbitrator (AIA, Art. 7/B/3; CCP, Art. 416/1/c, cf. Model Law, Art 11(3)(a)).

(e) If more than three arbitrators are to be appointed, those empowered to appoint the last arbitrator are determined by the parties in equal numbers in accordance with the principle stated in (d) above (AIA, Art. 7/B/4; CCP, Art. 416/1/ç).

(f) Where, under an appointment procedure agreed upon by the parties, (i) a party fails to act as required under such procedure, or (ii) the parties, or the two arbitrators are unable to reach an agreement expected of them under such procedure, or (iii) a third party, an organization or institution entrusted with the appointment of an arbitrator fails to do so, any party may request the civil court of general jurisdiction (in international arbitration) or the district civil court (in domestic arbitration) to make the appointment (AIA, Art. 7/B/4; CCP, Art. 416/2; cf. Model Law, Art. 11(4)).

The civil court of general jurisdiction or the district civil court may, if necessary, hear the parties before rendering a decision on the appointment of the arbitrator or the arbitral tribunal. This decision is final (AIA, Art. 7/B/4; CCP, Art. 416/2; cf. Model Law, Art. 11(4)). Where more than three arbitrators are appointed, the same principles apply (AIA, Art. 7/B/4; CCP, Art. 416/2, last sentence).

3. Grounds for challenge (AIA, Art. 7/C; CCP, Art. 417; Model Law, Art. 12)

Under the AIA and the CCP, an arbitrator may be challenged only if there are circumstances that give rise to justifiable doubts as to his or her impartiality or independence, or if he or she does not possess the qualifications agreed upon by the parties19.

In domestic arbitration, the CCP further states that a party may challenge the arbitrator it appointed or in whose appointment it participated only on grounds that come to its awareness after the appointment (CCP, Art. 417/2).

4. Challenge procedure (AIA, Art. 7/D; CCP, Art. 418/I; Model Law, Art. 13)

The challenge procedure set out in the AIA and the CCP is based on that of the Model Law. It leaves the parties free to agree on a procedure for challenging an arbitrator. [Page22:]

5. Failure or impossibility to act (AIA, Art. 7/F; CCP, Art. 420; Model Law, Art. 14)

Parallel provisions exist in the AIA and the CCP concerning an arbitrator's failure or impossibility to act. If the parties disagree over the existence of grounds necessitating the arbitrator's withdrawal, each of the parties may request the civil court of general jurisdiction (in international arbitration) or the district civil court (in domestic arbitration) to rule on the termination of the arbitrator's mandate. The court's decision is final.

6. Liability of arbitrators

Pursuant to Article 7/E of the AIA and Article 419 of the CCP, an arbitrator who, after accepting appointment, fails to carry out his or her functions without just cause, will be liable to a party for damage that party suffers as a result of that failure. This does not apply if the parties have agreed otherwise.

7. Appointment of substitute arbitrator (AIA, Art. 7/G; CCP, Art. 421; Model Law, Art. 15)

The AIA and the CCP correspond to the Model Law here. If the mandate of an arbitrator terminates for any reason, a substitute arbitrator shall be appointed in accordance with the procedure for appointing an arbitrator. The time taken to replace the arbitrator is handled differently in international and domestic arbitration: in the former it is deemed to be part of the duration of the arbitration but not in the latter.

F. Jurisdiction of the arbitral tribunal (Model Law, Arts. 16-17)

Chapter IV of the Model Law covers the competence of the arbitral tribunal to rule on its own jurisdiction and the power of the arbitral tribunal to order interim measures.

1. Competence of the arbitral tribunal to rule on its jurisdiction (AIA, Art. 7/H; CCP, Art. 422; Model Law, Art. 16)

Both the AIA and the CCP, like the Model Law, endorse the principle of Kompetenz-Kompetenz. Under both laws, the arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement (cf. ICC Rules of Arbitration 6(2)). An arbitration clause in a contract is treated independently of the other terms of the contract20. If the arbitral tribunal finds that the main contract is null and void, this does not entail ipso jure the invalidity of the arbitration clause.

2. Interim measures and preliminary orders (AIA, Art. 6/II; CCP, Art. 414/1-2; Model Law, Art. 17)

(a) Power of the arbitral tribunal to order interim measures

As in the Model Law, unless the parties agree otherwise, the arbitrator or arbitral tribunal can order any interim measures it deems appropriate if requested by a party. The AIA, unlike the Model Law and the CCP, also gives the arbitral tribunal the power to order an interim attachment (ihtiyati haciz).

The AIA forbids arbitrators to order interim measures or interim attachments that are enforceable through the state's enforcement authorities or other official bodies. It also states that interim measure and attachments ordered in arbitration cannot third persons. The CCP contains no provisions on this subject for domestic arbitration. However, it does allow arbitrators to decide on the collection of evidence (delil tespiti), unless otherwise agreed by the parties. No similar reference is found in the AIA.

(b) Enforcement of interim measures

If a party fails to comply with the decision of the arbitrators regarding an interim measure, the options of the other party differ depending on whether it is an international or a domestic arbitration. In international arbitration, a court to which the other party applies for assistance would decide whether or not to grant an interim measure irrespective of the existing interim measure already granted by the arbitrators. If the competent court sees a need to do so, it may officially seek the assistance of another, more fitting court (istinabe , rogatory commission). In domestic arbitration, on the other hand, the court to which the other party applies may directly declare the existing arbitral decision enforceable. [Page23:]

(c) Termination of the order for interim measures or for an attachment

A decision on interim measures or an attachment handed down by a court at the request of a party, before or during the arbitral proceedings, terminates as soon as the arbitral award becomes enforceable or in the event of the arbitrator or arbitral tribunal rejecting the arbitration proceedings (AIA, Art. 6/V; CCP, Art. 414/4).

The Model Law was amended with respect to interim measures in 2006. Articles 17A-17J have been added to Art. 17. It may be expected that the AIA and the CCP will also be amended in the near future in the light of these changes.

G. Conduct of the proceedings (AIA, Arts. 8-14; CCP, Arts. 428-432; Model Law, Arts. 18-27)

Chapter V of the Model Law contains provisions relating to equal treatment of the parties, determination of the rules of procedure, the place and language of the arbitration, the commencement of arbitral proceedings, the statements of claim and defence, hearings and written proceedings, the default of a party, experts appointed by the arbitral tribunal, and court assistance in taking evidence. Many of these provisions have been followed in the AIA and the CCP.

1. Language of the arbitration (AIA, Art. 10/C; Model Law, Art. 22)

In international arbitration, the arbitral proceedings may be held in Turkish or in the official language of a state recognized by Turkey. Failing agreement between the parties, the language or languages to be used in the proceedings may be determined by the arbitrator or arbitral tribunal (AIA, Art. 10/C). The CCP does not contain any provisions on language for domestic arbitrations.

2. Representation of the parties (AIA, Art. 8/B.2)

In international arbitration proceedings, parties may be represented by foreign natural or legal persons. There is no requirement for representatives to be lawyers. However, foreign persons may not represent parties in state courts in applications relating to international arbitration (AIA Art. 8/B). Only attorneys who are members of a Turkish Bar may represent parties in the Turkish state courts, and the Turkish law on attorneys makes Turkish citizenship a prerequisite for membership of a Turkish Bar21. On the basis of this law, it would appear that in domestic arbitration, too, parties may be represented only by lawyers who are members of a Turkish Bar and as such by Turkish nationals.

3. Statements of claim and defence, including terms of reference (AIA, Art. 10/D; CCP, Art. 428; Model Law, Art. 23)

When filing the request for arbitration and the answer to the request within the time limit they or the arbitral tribunal have decided, parties may submit all written evidence they consider to be relevant or may refer to evidence they will submit later (AIA, Art. 10/D; CCP, Art. 428/2). Unless otherwise agreed by the parties, either party may amend or supplement its claim or defense during the course of the arbitration (AIA, Art. 10/D/2; CCP, Art. 428/3; cf. Model Law, Art. 23(2)). In international arbitration, unless otherwise agreed by the parties, once the arbitral tribunal has received the request for arbitration and the answer to the request, it draws up its terms of reference (görev belgesi), in accordance with a provision inspired by the ICC Rules (AIA, Art. 10/E). The CCP does not mention terms of reference for domestic arbitrations.

4. Hearings and written proceedings (AIA, Art. 11/A; CCP, Art. 429; Model Law, Art. 24)

The AIA and the CCP allow arbitral tribunals to decide at their discretion whether or not to hold oral hearings for the submission of arguments, evidence and explanations from experts, or whether to conduct the proceedings on the basis of the contents of the case file only.

Unless the parties agree otherwise, if requested by one of the parties, the arbitral tribunal must hold a hearing at an appropriate stage of the arbitration (AIA, Art. 11/A; CCP, Art. 429/1; cf. Model Law, Art. 24(1)). [Page24:]

5. Default of a party (AIA, 11/C; CCP, Art. 430; Model Law, Art. 25)

The arbitral tribunal must terminate the proceedings (a) if the claimant unjustifiably fails to file its request for arbitration within the time limit that has been set (AIA, Art. 11/C/1; CCP, Art. 430/1/a); or (b) if the request for arbitration does not comply with legal requirements (AIA, Art. 10/D; CCP, Art. 430/1/a) and the irregularities are not cured within a time limit set by the arbitral tribunal (AIA, Art. 11/C/2; CCP, Art. 430/1/a).

6. Experts appointed by the arbitral tribunal (AIA, Art. 12/A; CCP, Art. 431; Model Law, Art. 26)

Under the AIA, the arbitral tribunal may (a) appoint one or more experts to report on specific issues to be determined by the arbitral tribunal; (b) ask the parties to give the experts any necessary explanations or to produce any relevant documents and information; (c) decide to conduct on-site inspections of goods or other property (AIA, Art. 12/A; CCP, Art. 431/1).

Unless otherwise agreed, experts who have delivered written or oral reports may be summoned to participate in hearings, at which the parties are entitled to address questions to the experts. Also, the parties may request that the arbitral tribunal hear party-appointed experts directly (expert witnesses) on the points at issue (AIA, Art. 12/A; CCP, Art. 431/2; Model Law, Art. 26(2)).

7. Court assistance in taking evidence (AIA, Art. 12/B; CCP, Art. 432; Model Law, Art. 27)

In international arbitration, the arbitral tribunal may apply to the civil court of general jurisdiction for assistance in the taking of evidence. For this purpose, the local court applies the provisions of the Code of Civil Procedure on the taking of evidence (AIA, Art. 12/B).

In domestic arbitration, a party (as opposed to the arbitral tribunal) may apply to the district civil court for assistance in the taking of evidence, but the arbitral tribunal's permission is required (CCP, Art. 432).

H. Making of the award and termination of the proceedings (Model Law, Arts. 28-33)

Chapter VI of the Model Law contains provisions on the rules applicable to the substance of the dispute, decision-making by a panel of arbitrators, settlement, the form and content of awards, the termination of proceedings, the correction and interpretation of awards, and additional awards. The AIA and the CCP have adopted several of these provisions.

1. Rules applicable to the substance of the dispute (AIA, Art. 12/C; Model Law, Art. 28)

(a) Substantive law

Under the AIA, the arbitral tribunal decides the dispute in accordance with the parties' contract and the rules of law they have chosen to apply to the merits (AIA, Art. 12/C). The law also states that relevant trade customs and usages under the applicable law shall be taken into account for the purpose of interpreting and complementing the terms of the contract (AIA, Art. 12/C). Unless otherwise agreed, reference to the law of a given state shall be to the substantive law of that state, excluding its conflict of laws rules and rules of procedure (AIA, Art. 12/C). If the parties have not specified the law applicable to the substance of the dispute, the arbitral tribunal applies the substantive law of the state with which the dispute has the closest connection (AIA, Art. 12/C; cf. Swiss PIL Statute, Art. 187). In the CCP, no reference is made to application of foreign substantive law in domestic arbitrations.

(b) Power to act <i>as amiable compositeur</i> and <i>ex aequo et bono</i> (AIA, Art. 12/C/3; CCP, Art. 433/3; Model Law, Art. 28(3))22

In both international and domestic arbitration, the arbitral tribunal cannot decide ex aequo et bono (hakkaniyet ve nafaset) or as amiable compositeur (dostane çözüm) unless expressly authorized to do so by the parties (AIA, Art. 12/C/3; CCP, Art. 433/3; cf. Model Law, Art. 28(3); Swiss PIL Statute, Art. 187(2); ICC Rules of Arbitration, Art. 21(3)). [Page25:]

2. Decision-making by a panel of arbitrators (AIA, Art. 13/A; CCP, Art. 433/1; Model Law, Art. 29)

Awards made by arbitral tribunals composed of more than one arbitrator are given by a majority decision, unless otherwise agreed by the parties (AIA, Art. 13/A; CCP, Art. 433/1). The presiding arbitrator may decide particular questions of procedure alone, if so authorized by the parties or by all the members of the arbitral tribunal (AIA, Art. 13/A; CCP, Art. 433/2; cf. Model Law, Art. 29; Swiss PIL Statute, Art. 189). Also, unless otherwise agreed, the arbitral tribunal may render partial awards (kismi karar) (AIA, Art. 14/A/2; CCP, Art. 436/2).

3. Settlement (AIA, Art. 12/D; CCP, Art. 434; Model Law, Art. 30)

If the parties settle their dispute during arbitration proceedings, the proceedings terminate. In international arbitration, the terms of the parties' settlement are recorded in the form of an award if so requested by the parties and if the arbitral tribunal finds the request appropriate (AIA, Art. 12/D; cf. Model Law, Art. 30(1)). In domestic arbitration, the arbitral tribunal is not allowed to exercise discretion over the appropriateness of the settlement: if requested by the parties, the terms of the settlement are necessarily recorded in the form of an award unless they are contrary to good morals (ahlak) or public order (kamu düzeni) or relate to an issue that can be submitted to arbitration (CCP, Art. 434).

4. Form and content of awards (AIA, Art. 14/A; CCP, Art. 436/1; Model Law, Art. 31):

(a) Form

The Model Law requires awards to be made in writing and to be signed by the arbitrators. There is no explicit reference to the written form of awards in the AIA, but its provisions inevitably imply that they are to be in writing. Both the AIA and the CCP require awards to be signed by the arbitrators (AIA, Art. 14/A/4; CCP, Art. 436/1/f).

(b) Content

The AIA requires awards to state the legal reasons upon which they are based, the place of the arbitration, their date, the full names of the arbitrators, the signatures of all arbitrators, any dissenting opinions, a statement mentioning that an application to set aside an award can be made in court (AIA, Art. 14/A; CCP, Art. 436/1; cf. Model Law, Art. 31(2), (3)), and the costs of the arbitration (AIA, Art. 16/B; CCP, Arts. 436/1/ç, 440/6).

An award rendered in a domestic arbitration must in addition list clearly and fully, in a numbered sequence, the rights and obligations imposed on the parties and give details of the costs of procedure. Unlike the AIA, the CCP (Art. 436/1/f ) considers it sufficient if the award has been signed by a majority of the arbitrators. In domestic arbitration, therefore, a single arbitrator cannot block the completion of the proceedings by refusing to sign the award.

The AIA does not require the reasons for any dissenting opinion to be attached to the award although it is common practice to do so. The CCP states that the dissenting opinion of an arbitrator must be mentioned in the award only if the reasons for the dissenting opinion are attached to the award (CCP, Art. 436/1/f).

In international arbitration, the arbitral tribunal sends the award and the case file to the civil court of general jurisdiction for safekeeping only if the parties so request and provided they pay the relevant costs (AIA, Art. 14/A/4). In domestic arbitration, on the other hand, the arbitral tribunal does this on its own motion (CCP, Art. 436/3).

5. Termination of the proceedings (AIA, Art. 13/A; CCP, Art. 435; Model Law, Art. 32)

Under both the AIA and the CCP, the arbitral proceedings are terminated by a final award or by the occurrence of one of the following situations:

(i) withdrawal of the claimant's claim, unless the respondent objects and the arbitral tribunal recognizes that the respondent has a legitimate interest in obtaining a final settlement of the dispute (AIA, Art. 13/B/1; CCP, Art. 435/1/a);

(ii) agreement between the parties upon the termination of the proceedings (AIA, Art. 13/B/2; CCP, Art. 435/1/b);

(iii) a finding by the arbitral tribunal that it is no longer necessary or possible to continue the proceedings (AIA, Art. 13/B/3; CCP, Art. 435/1/c); [Page26:]

(iv) rejection by a court of an application to extend the time limit for arbitration (AIA, Art. 10/B/2 and 13/B/4; CCP, Art. 435/1/ç) (situation not listed in the Model Law);

(v) the arbitral tribunal's inability to render a unanimous award whereas the parties agreed that the award should be made unanimously (AIA, Art. 10/B/5 and 13/B/4; CCP, Art. 435/1/d);

(vi) impossibility to continue the arbitration within the time set due to a party's loss of its capacity to be a party to the arbitration (AIA, Art. 11/B and Art. 13/B/6; CCP, Art. 435 does not list this as a reason for terminating the proceedings);

(vii) failure to pay an advance for the costs of the proceedings (AIA, Art. 13/B/7 and Art. 16/C; CCP, Art. 435/1/e).

6. Correction and interpretation of awards; additional awards (AIA, Art. 14/B; CCP, Art. 437; Model Law, Art. 33)

The AIA contains provisions on the correction and interpretation of awards that are consistent with those of the Model Law. The CCP differs by limiting requests for the 'explanation' (tavzih) of an award to a certain issue in the award or to a certain part of the award, and it does not mention at all requests for 'interpretation' (yorum) of an award. The provisions of the AIA and the CCP on additional awards correspond to those of the Model Law.

I. Recourse against award (AIA, Art. 15/A; CCP, Art. 439; Model Law, Art. 34)

Here, Turkish law is based not only on the Model Law but also on the Swiss PIL Statute, Article 190.

1. Application for setting aside as an exclusive recourse against an arbitral award

(a) Grounds for setting aside (AIA, Art. 15/A; CCP, Art. 439; Model Law, Art. 34(2))

The AIA provides grounds for setting aside arbitral awards that are broadly similar to those of Article 34 of the Model Law. The only recourse against an arbitral award permitted by the AIA is an application for setting aside, which is filed in the competent civil court of general jurisdiction. In domestic arbitration, the competent court is the district civil court (CCP, Arts. 410, 439/1). The court is required to deal speedily with such cases and give them priority (AIA, Art. 15/A; cf. Model Law, Art. 34 (1); Swiss PIL Statute, Art. 190).23

The following circumstances are listed in the AIA as grounds for setting aside awards. Some of are examined by the court only at the request of one of the parties, while others are examined by the court on its own motion.

Grounds examined at the request of a party

An award may be set aside by the court if the applicant proves that:

(i) a party to the arbitration agreement lacks capacity or the arbitration agreement is not valid under the law chosen by the parties or, failing any choice, under Turkish law;

(ii) the appointment and constitution of the arbitral tribunal was not in accordance with the parties' agreement or the procedure provided in the AIA;

(iii) the award has not been rendered within the time limit set for the arbitration (not listed in the Model Law);

(iv) the arbitral tribunal has wrongly and unlawfully declared itself to have or not to have jurisdiction;

(v) the arbitral tribunal has decided on a matter beyond the scope of the arbitration agreement, has not decided on all of the claims, or has exceeded its jurisdiction;

(vi) the arbitral proceedings have not been conducted in accordance with the parties' agreement on procedure or, failing such agreement, the provisions of the AIA, provided this has affected the merits of the award (this latter stipulation is not listed in the Model Law) (cf. Model Law, Arts. 34(2)(a)(iv) and 36(1)(a)(iv));

(vii) the principle of equal treatment of the parties or their right to be heard has not been respected (AIA, Art. 15/A/1; CCP, Art. 439/2; cf. Model Law, Art. 34 (2)(a); Swiss PIL Statute, Art. 190). [Page27:]

Similar grounds for setting aside awards in domestic arbitration are provided in the CCP, but no reference is made there to foreign substantive law agreed upon by the parties as the applicable law (Art. 439).

Grounds examined by the court on its own motion

The arbitral award may also be set aside if the court finds that:

(i) the subject matter of the dispute is not capable of settlement by arbitration under Turkish law;

(ii) the award is incompatible with public order (kamu düzeni) (AIA, Art. 15/A/II; CCP, Art. 439/1/g, g; cf. Model Law, Art. 34(2)(b)).

(b) Suspension of enforcement

In international arbitration, the enforcement of an arbitral award is suspended when proceedings to set aside the award are initiated (AIA, Art. 15/A/II; Model Law, Art. 34(4)). In domestic arbitration, the enforcement of the award is not be suspended, but a stay of execution may be obtained upon request, subject to the requesting party providing sufficient security (CCP, Art. 439/4).

2. Waiver of application to set aside

In international arbitration, parties may fully or partly waive their right to apply for the award to be set aside (AIA, Art. 15/A). Parties whose domicile or habitual residence is outside Turkey may waive all rights to initiate such proceedings, or they may limit these to one or more of the grounds listed in Article15/A. They may do so in an express statement in the arbitration agreement or in a subsequent written agreement. The CCP does not offer any possibility of waiving the right to have an award set aside.

3. Court decision on setting aside

Applications to have an award set aside are decided on the case file alone, unless the court handling the case decides otherwise. If the award is set aside, and unless otherwise agreed, the parties may appoint new arbitrators or keep the same arbitrators and set a new time limit for the arbitration (AIA, Art. 15/A; CCP, Art. 439/7).

4. Appeal against the court's decision

Appeals (temyiz) against decisions of the civil court of general jurisdiction (in the case of international arbitration) and the district civil court (in the case of domestic arbitration, once these courts become operational) lie with the Court of Cassation (Yargitay). They are subject to the general provisions in Articles 361-373 of the new CCP, and the grounds on which an appeal may be made coincide with those listed above for setting aside awards. Like other courts, the Court of Cassation is required to give such cases priority and handle them speedily (AIA, Art. 15/A/VI; CCP, Art. 439/6).

J. Recognition and enforcement of awards (Model Law, Arts. 35-36)

1. Recognition and enforcement

The AIA partly follows the Model Law here. The enforcement of final awards made pursuant to the AIA is subject to the following procedure.

(i) When a court decision refusing to set aside an award becomes final, the court issues a certificate of enforceability of the arbitral award (hakem kararlarinin icra edilebilirligine iliskin belge), after which the arbitral award, like any final court judgment, can be enforced in Turkey in accordance with provisions of the Code of Enforcement and Bankruptcy.24 So-called execution offices (icra dairesi) are invested with the authority to enforce. The costs of enforcement are subject to the law on court charges (AIA, Art. 15/B).25

(ii) Where the certificate of enforceability of the award is issued at a party's request upon the expiry of the time limit for initiating proceedings to set aside or upon the parties' waiver of their rights in this respect, the court considers only the two grounds it is authorized to examine on its own motion (AIA, Art. 15/B).

As far as domestic arbitration is concerned, no reference is made to a certificate of enforceability for awards submitted to the execution offices. Such a certificate could be obtained by parties upon request under the 1927 CCP (Art. 532) and we believe it can be regarded as implicit in the new CCP. [Page28:]

2. Refusal of recognition or enforcement (Model Law, Art. 36)

Unlike the Model Law, the AIA and the CCP do not contain two separate lists of grounds for setting aside awards on the one hand and refusing their recognition and enforcement on the other. The AIA and the CCP empower the civil court of general jurisdiction and district civil court to examine on their own motion whether the subject matter of the award can be settled by arbitration (arbitrability) and whether the award is compatible with public order (AIA, Art. 15/A/2; CCP, Art. 439/2/g). They do so on the basis of the case file only, unless they decide otherwise (AIA, Art. 15/B; CCP, Art. 439/5).

K. Costs of arbitration

1. Scope of costs

The arbitral tribunal is required to indicate the costs of the arbitration in the award (AIA, Art. 16/B; CCP, Art. 436/1/ç). Costs are likewise mentioned in a decision confirming a settlement between the parties (AIA, Art. 16/D; CCP, Art. 442/5).

The costs of arbitration include:

(i) the arbitrators' fees (the CCP also explicitly mentions the fees of a secretary to the arbitral tribunal, whom the arbitrators are free to appoint (CCP, Art. 441/1/a));

(ii) travel costs and other expenses incurred by the arbitrators;

(iii) fees paid to experts appointed by the arbitral tribunal or other persons whose assistance is required, and the costs of on-site inspections;

(iv) the travel costs and other expenses of witnesses, to the extent that such expenses are approved by the arbitral tribunal;

(v) the fees of counsel to the winning party, assessed on the basis of a minimum tariff which is published in the Official Gazette26 after being updated annually by the Union of Turkish Bar Associations (Türkiye Barolar Birligi) and approved by the Ministry of Justice (Adalet Bakanligi);

(vi) official charges paid for applications to state courts under the AIA;

(vii) expenses incurred for notifications in the arbitral proceedings (AIA, Art. 16/B; CCP, Art. 441/1).

2. Advance payment for costs

In international arbitration, the arbitral tribunal may request the claimant to deposit an advance for the costs of proceedings (AIA, Art. 16/C). In domestic arbitration, the arbitrators may, when necessary, ask both the claimant and the respondent to pay an advance, which is shared equally between the parties, unless otherwise agreed (CCP, Art. 442). In both, international and domestic arbitration, if the advance is not paid within the time limit set by the arbitral tribunal, the proceedings may be suspended (AIA, Art. 16/C/II; CCP, Art. 442/2). The proceedings will resume if the parties pay within 30 days (in international arbitration) or one month (in domestic arbitration) of being notified of the suspension of the proceedings. Otherwise, the proceedings will terminate (AIA, Art. 16/C; CCP, Art. 442/2).

3. Apportionment of costs

Unless otherwise agreed by the parties, the costs of proceedings shall be borne by the losing party. If there is no clear-cut winner but each party prevails in part, the costs of the proceedings will be apportioned between them in accordance with the extent of their success (AIA, Art. 16/D; CCP, Art. 442/4).

L. Arbitrators' fees

Both the AIA and the CCP provide that, unless otherwise agreed by the parties, the arbitrators' fees shall be agreed between the arbitrators and the parties, taking into account the amount and nature of the dispute and the duration of the proceedings (AIA, Art. 16/A; CCP, Art. 440/1). To determine the fees parties may rely on 'established international rules' (wording of the AIA), 'established rules' (wording of the CCP) or 'institutional arbitration rules' (wording of both) such as the ICC Rules (AIA, Art. 16/A/II; CCP, Art. 440/2).

Arbitrators' fees will be fixed on the basis of the tariff (ücret tarifesi) issued by the Ministry of Justice27 only if: (i) the parties and the arbitrators cannot agree on fees, (ii) the parties' arbitration agreement does not include any provision in this [Page29:] respect, or (iii) the parties' arbitration agreement makes no reference to established international (or domestic) rules or to institutional arbitration rules (AIA, Art. 16/A/III; CCP, Art. 440/3).

Unless otherwise agreed by the parties, the presiding arbitrator will receive a fee 10% higher than that paid to each of the other arbitrators (AIA, Art. 16/A/IV; CCP, Art. 440/4).

M. Maximum duration of proceedings

According to both the AIA and the CCP, if not agreed otherwise by the parties, the arbitral tribunal must render its award within a year of the appointment of a sole arbitrator or, in the case of a tribunal composed of more than one arbitrator, of the date of the minutes recording the tribunal's first formal meeting (AIA, Art. 10/B; CCP, Art. 427/1). The parties may agree to extend this period. If they cannot agree, the relevant court may extend the period at the request of one of the parties. Its decision is final (AIA, Art. 10/B/II; CCP, Art. 427/2).

N. Re-opening of trial after a final arbitral award

The possibility of re-opening a trial already existed after a final judgment ( yargilamanin iadesi) in state court proceedings as well as after a final arbitral award in domestic arbitration in a number of specific situations. Under the 2011 CCP, this can still be requested by analogy in domestic arbitration in some of the situations listed (1927 CCP, Arts. 445, 534; 2011 CCP, Arts. 375, 443).28 As before, this possibility does not exist in international arbitration under the AIA.

Enforcement of foreign arbitral awards in Turkey

Turkey acceded to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards on 2 July 1992.29 As the New York Convention has been widely adopted (ratified by 146 states at the beginning of 2012), the enforcement of foreign awards in Turkey will in most instances be governed by its provisions. These are well known and will not be discussed in this article. In the rare cases to which the New York Convention does not apply, the enforcement of awards is governed by Turkey's Act on Private International Law and Procedural Law (APIL).30

The APIL differs from the New York Convention in that it does not define what constitutes a foreign arbitral award. What makes an award foreign under this statute has been left for the courts and scholars to determine.

Awards enforced under the APIL must satisfy two initial requirements: they must have been made in a state that gives Turkish awards reciprocal treatment, and they must be final and binding on the parties (APIL, Art. 60/1). The party seeking enforcement must apply to a civil court of general jurisdiction by for an enforcement order. The competent court may be determined by the parties, failing which it will be the court in whose territory the domicile of the party against whom the enforcement is sought is located (APIL, Art. 60/2). The party seeking enforcement must produce in court (i) the original arbitration agreement or clause, or a certified copy thereof; (ii) the original award or a certified copy thereof; (iii) a certified Turkish translations of these documents if they are not in Turkish (APIL, Art. 61/1).

Enforcement may be refused on a number of grounds, some of which are considered by the court on its own motion and others only if raised by the person against whom the award is to be enforced.

The first category of grounds includes:

(i) the non-existence of an arbitration agreement or of an agreement containing an arbitration clause (APIL, Art. 62/1/a);

(ii) the award's incompatibility with public policy (ordre public) or good morals (APIL, Art. 62/1/b); or

(iii) the non-arbitrability of the subject matter of the award under Turkish law (APIL, Art 62/1/c).

The second category includes the following circumstances:

(i) that the objecting party was not properly represented before the arbitral tribunal and did not later expressly accept the procedural steps taken in the course of the arbitration (APIL, Art. 62/1/ç);

(ii) that the objecting party was not given proper notice of the appointment of the arbitrator or was deprived of the opportunity to present its claims or responses in the arbitral proceedings (APIL, Art. 62/1/d; cf. New York Convention, Art. V(1)(b)); [Page29:]

(iii) that the arbitration agreement or clause was void under the law to which the parties subjected it or, if no law was chosen, under the law of the country where the award was made (APIL, Art. 62/1/e; cf. New York Convention, Art. V(1)(a));

(iv) that the appointment of the arbitrators or the arbitral procedure followed by the arbitrators was not in accordance with the agreement of the parties or, if no agreement was made, the law of the country where the award was made (APIL, Art. 62/1/f; cf. New York Convention, Art. V(1)(d));

(v) that the award deals with a dispute not contemplated by or not falling within the terms of the arbitration agreement or clause, or contains decisions on matters beyond their scope (APIL, Art. 62/1/g; cf. New York Convention, Art. V(1)(c));

(vi) that the award has not yet become final, enforceable or binding on the parties under the law of the country to which it is subject, the law of the country where it was made or the procedural rules applicable to the award, or the award has been set aside by the competent authority of the county where it was made (APIL, Art. 62/1/h; cf. New York Convention, Art. V(1)(e)).31

If the requirements for enforcement of a foreign arbitral award are satisfied, the competent court renders an enforcement decision, enabling the award to be enforced like a judgment handed down by a Turkish court (APIL, Art. 60).

Conclusion

International arbitration under the 2001 AIA based on the 1985 UNCITRAL Model Law and domestic arbitration under the 2011 CCP inspired by and based on the 2001 AIA constitute two significant steps in the progressive westernization of Turkish law since the creation of the Turkish Republic in 1923. The AIA, in particular, was a major development that has made Turkish law much better adapted to the needs of international commercial transactions. It can be expected that similar changes made in the 2011 CCP will soon improve the practice of domestic arbitration.

Link to select bibliography

1
A draft law on mediation (Hukuk Uyuşmazlıklarında Arabuluculuk Kanunu Tasarısı), based on EU legislation (Green Paper on alternative dispute resolution in civil and commercial law, (COM (2002) 196 final) and the Proposal for a Directive of the European Parliament and of the Council on certain aspects of mediation in civil and commercial matters (COM (2004) 718 final, 2004/0251 (COD)) and inspired by the Austrian Mediationsgesetz of 1 May 2001, is currently being discussed in relevant circles.

2
Hukuk Usulu Muhakemeleri Kanunu, law no. 1086, Official Gazette nos 622, 623, 624 of 2, 3, 4 July 1927, as amended.

3
Milletlerarası Tahkim Kanunu, law no. 4686 of 21 June 2001, Official Gazette no. 24453 of 5 July 2001.

4
Law no. 6100 of 12 January 2011, Official Gazette no. 27836 of 4 February 2011.

5
Law no. 3533, Official Gazette no. 3961 of 16 July 1938.

6
Governmental decree having power of law no. 91, Official Gazette no. 18183 of 6 October 1983.

7
Law no. 2822, Official Gazette no. 18040 of 7 May 1983.

8
Tüketicinin Korunması Hakkında Kanun, law no. 4077 of 23 February 1995, Official Gazette no. 22221 of 8 March 1995.

9
Turkish parties were the 4th most frequent nationality in cases registered with the ICC International Court of Arbitration in 2010.

10
The AIA contains 19 relatively long Articles, composed of several unnumbered paragraphs. For the sake of easy reference, we have occasionally used Roman numerals after the Article number to denote the relevant paragraph. In the 2011 CCP and other laws paragraphs are generally numbered using Arabic numerals.

11
Doğrudan Yabancı Yatırımlar Kanunu, law no. 4875 of 5 June 2003 on foreign direct investments, Official Gazette no. 25141 of 17 June 2003, Art. 2.

12
Law no. 4501 of 21 January 2000 relating to the principles to be complied with where disputes deriving from concession covenants and agreements related to public services are referred to arbitration.

13
e.g. Agreement between Russian Federation and Turkey regarding the Promotion and Reciprocal Protection of Investments, 15 December 1997; Treaty between the USA and Turkey concerning the Reciprocal Encouragement and Protection of Investments, 3 December 1985; Treaty between Federal Republic of Germany and Turkey concerning the Reciprocal Promotion and Protection of Investments, 2 June 1962. See www.unctadxi.org/templates/docsearch.aspx?id=779

14
See the decision of the Court of Cassation, 15th Civil Chamber, 31 May 1979, E. 1979/1195, K. 1979/1330, on the non-arbitrability of rights in rem in immovable property.

15
Tebligat Kanunu, law no. 7201, Official Gazette no. 10139 of 19 February 1959, as amended.

16
On the definition of an arbitration agreement, see Court of Cassation, General Assembly for Unification of Decisions, Decision dated 28 January 1994, E. 1993/4; K. 1994/1. See also the decision of the 13th Civil Chamber dated 25 April 1991 E. 1990/8778; K. 1991/4492 on the application of the Code of Obligations with respect to the validity of the arbitration clause.

17
See the decision of the Court of Cassation, 13th Civil Chamber, dated 25 September 2006, E. 2006/7789, K. 2006/12275, on the written form of the arbitration clause.

18
İcra ve İflas Kanunu, law no. 2004, Official Gazette no. 2128 of 19 June 1932, as amended.

19
See the decision of the Court of Cassation, 15th Civil Chamber, 18 January 2006, E. 2005/5778, K. 2006/93, on the challenge of an arbitrator.

20
See the decision of the Court of Cassation, 15th Civil Chamber, dated 27 June 2006, E. 2007/2145, K. 2007/4389, on Kompetenz-Kompetenz.

21
Avukatlık Kanunu, law no. 1136, Official Gazette no. 13168 of 7 April 1969, as amended, Art. 35.

22
As in force from 1 January 2012.

23
See the decision of the Court of Cassation, 15th Civil Chamber, 21 September 2010, E. 2010/4040, K. 2010/4663, on the competence of commercial courts in relation to actions to set aside.

24
İcra ve İflas Kanunu, law no. 2004, as amended.

25
Harçlar Kanunu, law no. 492, Official Gazette no. 11756 of 17 July 1964, as amended. See the decision of the Court of Cassation, 19th Civil Chamber, 15 September 2009, E. 2009/5703, K. 2009/8256, on the obligation to pay a charge for a judgment when applying for enforcement.

26
According to Article 12 and Annex, Part 3 (Official Gazette no. 28149 of 21 December 2011):

27
Official Gazette no. 27869 of 9 March 2011:

28
Briefly: when an arbitrator who is banned from the case or who has been successfully challenged has rendered an award; when a case has been heard and decided with the participation of representatives who were not authorized to represent the parties; when it is established after the award has been rendered that an important witness had made false statements, or a significant expert witness or translator had deliberately made false statements, or when it is established by confession before authorities (ikrar) or by written evidence that the party that has obtained award in its favour had either taken an unfaithful oath (yemin ) before judge(s) or had committed fraudulent (hileli) acts which affected the outcome of the case; when a second judgment has been rendered in an identical case which contradicts the outcome of the initial case and both judgments have become final; or when the European Court of Human Rights has definitively ruled that the arbitral award was rendered in violation of the European Convention on Human Rights and its protocols.

29
Law No. 3731, 8 May 1991, Official Gazette no. 21002 of 25 September 1991.

30
Milletlerarası Özel Hukuk ve Usul Hukuku Hakkında Kanun (MÖHUK), law no. 5718, 27 November 2007, Official Gazette no. 26728 of 12 December 2007, Arts. 60–63. It should be noted that international conventions ratified by Turkey take priority (APIL, Art. 1.2).

31
See the decision of the Court of Cassation, General Assembly of Civil Chambers, 5 May 1999, E. 1999/15-235, K. 1999/273, on the interpretation of ‘Turkish law’ in relation to procedural rules to be applied by arbitrators.