Opening remarks

The conference kicked off with introductory remarks from M. Rifat Hisarcıklıoğlu (President, Union of Chambers and Commodity Exchanges of Turkey (TOBB); Chair of the Board of ICC Turkey) who emphasized ICC’s leading role in international trade and its ever-growing success in both responding and adapting to the needs and necessities of the business community.

Alexis Mourre (President, ICC International Court of Arbitration, Paris) then presented ICC’s 2020 track record and underlined Turkey’s valuable contribution to the international arbitration practice: ICC Arbitration in 2020 involved 57 Turkish parties, 23 arbitrators of Turkish nationality, and there were an increasing number of cases where the language of arbitration was Turkish. He also added that over the last five years, 33 ICC Arbitrations were seated in Turkey, essentially Istanbul, Ankara and Izmir.

Session 1- The judiciary approach to arbitration in Turkey

Prof. Dr. Korkut Özkorkut (Professor, Ankara University Faculty of Political Sciences; Co-Chair of ICC Turkey Arbitration Commission, Ankara) moderated the first session.

Judge Dr. Adem Aslan (11th Civil Chamber, Court of Cassation, Ankara) provided an overview of the recent case law of the Court of Cassation (‘Court’), highlighting the following noteworthy decisions on setting aside arbitral awards:

  • One award was partially set aside because the tribunal decided on a matter not to be resolved by arbitration according to the arbitration agreement.1
  • The arbitrators' determination of their fees does not constitute a breach of the International Arbitration Law (IAL) where parties agreed on the arbitrators’ discretion to decide on the arbitration costs, including their fees, when executing the terms of reference.2
  • The Court held that there is no contradiction and no breach of public order where the reasoned award mentions a default date and the short award remains silent on the same.3
  • The Court held that not following certain procedural rules such as requesting an expert opinion or drafting terms of reference does not go against public policy. The Court indicated that the grounds for setting aside arbitral awards are numerus clausus, and the violation of the procedural laws is not one of them.4
  • It is not possible for persons whose place of residence/business is in Turkey to waive their right to initiate an action to set aside an award.5
  • The Court held that it is against the principle of good faith for a party to object the jurisdiction of the court and file a counter-claim without taking into account the arbitration clause in the contract.6
  • If the parties agree to resolve their dispute primarily through arbitration, the courts must make sure that arbitration is in fact not an option before voiding the arbitration agreement and referring the dispute to state courts.7

The second speaker, Judge Nevzat Boztaş (Chair of 14th Civil Chamber, Istanbul Regional Court of Justice, Istanbul) explained the regulatory framework for judicial review of arbitral awards:

  • The Code of Civil Procedure (CCP) governs domestic arbitration while the International Arbitration Law (IAL) regulates international arbitration whose seat of arbitration is in Turkey. Arbitral awards resulting from both types of arbitration are subject to judicial review limited to arbitrability and public order, either through an action for setting aside or a request for an enforcement certificate.
  • If the place of arbitration is outside of Turkey, then the judicial review ensues with recognition and enforcement of foreign arbitral awards under the rules of International Private and Civil Procedure Law and the New York Convention.

Judge Boztaş noted that regardless of the applicable rules, courts should not compromise the prohibition of ‘révision au fond’, and the grounds for refusal or setting aside should only be limited to those set out under the relevant legislation.

Utku Coşar (Partner, Coşar Law Firm, Istanbul) presented the challenges practitioners and foreign investors experience, as well as the recent case law regarding the application to Turkish parties of Law No. 805 on the mandatory use of Turkish language when drafting contracts. Should the parties fail to comply with such obligation, agreements shall be deemed null and void. Ms Coşar informed the attendees about two conflicting Court of Cassation decisions:

  1. The Court held that the obligation to use the Turkish language is not applicable to disputes involving a foreign element even though the parties are Turkish.8
  2. In another decision rendered only one month later, the Court held that when the parties are Turkish, the agreements are executed and the main transaction takes place in Turkey, the parties must comply with the mandatory use of Turkish language in their agreements. Since the main performance was already fulfilled, the Court decided to only void the arbitration clause on the grounds of separability.9

Ms Coşar criticized the strict interpretation of Law No. 805 as it creates hurdles for foreign investors, locally incorporated companies with foreign stakeholders and international arbitration practitioners and ultimately it affects the validity of arbitration agreements and the enforcement of arbitral awards. She, however, praised the Court’s pro-arbitration approach in light of the broad definition of ‘foreign element’.10

Session 2 – ICC latest updates

Alexander G. Fessas (Secretary General, ICC Court, Paris) explained that his focus would be on key recent developments. He reminded the participants of ICC’s resilience and how teams are dedicated to overcome challenges, even during difficult times. During the past year, ICC has ensured business continuity by providing uninterrupted services. For example, ICC has allowed electronic submission of requests for arbitration and provided immediate guidance notes on certain challenges caused by the pandemic.11

Mr Fessas also emphasized how timely the new ICC Rules on Arbitration have entered into force and are deemed as a testament of the ICC wanting to move forward. He also shared the good news that parties will be able to rely on fully digitalised services through a new case management platform, which will allow documents such as terms of references and awards to be concluded electronically and parties to be e-notified. He also explained that the publication of awards would be a great step towards increasing transparency. He concluded his speech by reminding us that at the beginning of July the membership of the ICC Court will be renewed, bringing about the next session.

Session 3 – Meet and greet with the President-elect of the ICC Court

An interview with Claudia Salomon, selected as the next President of the ICC International Court of Arbitration, was conducted by Asli Yilmaz (Managing Counsel, ICC Court, Paris) and Bennar Aydoğdu, (Founder, BennArb Law Firm; ICC Court Member; Co-Chair of ICC Turkey Arbitration Commission, Bursa).

As a tribute to International Women’s Day on 8 March and Claudia Salomon becoming the first woman President of the ICC Court, the interview started with Ms Salomon explaining her experience in arbitration and her sources of inspiration by referring to the late Ruth Bader Ginsburg, who said ‘fight for things you care about but do it in a way that will lead others to join you’. Ms Salomon stated that there is still more to do in terms of increasing diversity, emphasizing that she plans to treat this as a priority.

During the interview, the 2020 record number of ICC cases was mentioned. Ms Salomon stated that this was due to the ICC being able to operate fully virtually and smoothly. Another reason she mentioned was the scrutiny of awards, which increases client satisfaction as well as trust in the process.

Ms Salomon concluded by setting out her vision for the future which includes ensuring that ICC Arbitration is a chosen method of dispute resolution and that the service provided exceeds client expectation.

Session 4 – Are M&A transactions and related disputes suitable to arbitration?

This panel, which was moderated by Prof. Dr. Ercüment Erdem (Senior Partner, Erdem & Erdem Law Office; ICC Court Member, Istanbul), comprised Eirini-Stella Leptourgou (Counsel, ICC Court, Paris, Eastern Mediterranean and Middle East team), Demet Kaşarcıoğlu (Senior Lawyer, Esin Attorney Partnership, Istanbul) and Prof. Dr. Tolga Ayoğlu (Galatasaray University Faculty of Law, Department of Commercial Law, Istanbul).

Following a presentation of the types of disputes that arise out of M&A transactions, panellists discussed (i) whether such disputes are arbitrable, and (ii) the jurisdictional objections that may arise. Panellists also addressed whether the dissolution of companies is suitable for arbitration. As M&A disputes usually arise from a contract, they are in principle arbitrable and the reliefs sought include damages, specific performance and requests for declarations. Issues related to specific performance concern (i) the exercise of option rights, particularly in cases where shares are not deposited into an escrow account, and (ii) voting agreements.

In this framework, the law applicable to the relevant contract which includes such rights is of crucial importance.

As M&A disputes are complex disputes that involve multiple parties/contracts, procedural issues such as consolidation and joinders frequently come up. The importance of emergency arbitrations in M&A disputes, which represent 17% of the total applications was also highlighted. The interim reliefs that may be requested include measures to safeguard the value of the company and those preventing the sale of assets, making further disclosure in breach of a confidentiality undertaking and ordering the shares to be put into an escrow account.

Closing remarks

Sami Houerbi (Director, ICC Arbitration and ADR, MENA; Founding Partner, Houerbi Law Firm) stated three indicators of the growth of arbitration in Turkey: the increased involvement of Turkish parties, the number of Turkish arbitrators appointed, and arbitrations taking place in Turkey. Mr Houerbi stressed that the judiciary’s pro-arbitration stance plays a crucial role in the growth of arbitration in Turkey. H. Banu Yılmaz Doğan (Secretary General of ICC Turkey) brought the conference to an end stating that they will commence work for the 17th ICC Turkey Arbitration Day and expressing her thanks to all participants.


1
15th Chamber, E.2020/2230-K.2021/148, 22.01.2021.

2
15th Chamber, E.2020/1387-K.2020/2553, 24.09.2020.

3
15th Chamber, E.2020/279-K.2020/1042, 12.03.2020.

4
Procedural breaches relating the basic values of the society, general morality and manners, fundamental values such as fundamental rights and freedoms set out in the Constitution, would, however, constitute a ground for the annulment of the award.15th Chamber, E.2019/2474-K.2019/3640, 26.09.2019. Judicial assistance and review in arbitration is limited only to the grounds set out under the law.

5
15th Chamber, 2019/2927-3987, 17.10.2019.

6
11th Chamber, E.2018/70-K.2019/5343, 12.09.2019.

7
15th Chamber, E.2019/2824-K.2019/5139, 12.12.2019.

8
15th Chamber, E.2020/1714-K.2020/2652, 02.10.2020

9
15th Chamber, E.2019/3156-K.2020/2913, 05.11.2020.

10
The definition of ‘foreign element’ may be found in Art. 2 of the IAL.

11
E.g. ‘ICC Guidance Note on Possible Measures Aimed at Mitigating the Effects of the COVID-19 Pandemic’ (9 April 2020), available at https://iccwbo.org/publication/icc-guidance-note-on-possible-measures-aimed-at-mitigating-the-effects-of-the-covid-19-pandemic/.