Headnote

Arbitration award – Clarification of award – Content of award – Grounds for annulment of award – Ratification

Summary of facts

The Petitioner entered into a charter-party agreement with the Respondent for the hire of a ship. Thereafter, the Petitioner failed to return the ship it had hired from the Respondent on the due date. The Respondent therefore requested the Court to appoint an arbitrator to resolve the dispute. The Court appointed a maritime expert as arbitrator. An arbitration award in favour of the Respondent was issued. The Respondent requested from the Court of First Instance to ratify the arbitration award while the Petitioner requested the invalidation of the award. The Court of First Instance rejected the Petitioner’s request and ratified the award. The Petitioner appealed to the Court of Appeal. The Court of Appeal initially determined that the award should be returned to the arbitrator for clarification; however, because of the death of the arbitrator it could not do so. The Court upheld the decision of the Court of First Instance. The Petitioner filed a petition to cassation.

Held

The petition to cassation was dismissed.

When considering the ratification of an award, the Court may return it to the arbitrator who issued it for clarification if the award is ambiguous.

The Court may not review the merits of the case when considering the ratification of an award, except for matters pertaining to public order. The control of the Court is restricted to the procedural aspects set forth in Articles 212 and 216 of the Civil Procedure Code.

Judgment

Article 214 of the Civil Procedure Code provides that if the arbitrator omits to resolve any of the issues agreed upon in the arbitration clause, or if the award is ambiguous to an extent preventing its execution, the ratifying court may decide to return such award to the arbitrator to consider any omitted issues or to clarify the award.

The court ruling issued to this effect shall be deemed to be issued before final resolution of the subject matter of the arbitration. By such ruling the court may not resolve the subject matter of the dispute that the arbitrator has resolved by means of a final and binding award.

It is established from the case papers that the Court of Appeal decided, in accordance with the provisions of Article 214 of the Civil Procedure Code, to return the award to the arbitrator to consider the objections and requests made by the Petitioners in their rejoinders and to consider any issues and notes presented by them. When the Court of Appeal was informed of the death of the arbitrator in question, the Court decided to consider the challenged judgment itself and to answer the objections and requests of the Petitioners recorded in the minutes of the court hearing held on 25 September 1995.

Answering the above requests made by the Petitioners, the Court of Appeal indicated that such claims may not be included in the statement of claim and are not substantiated by the arbitration document. Additionally, the Court may not consider the award or the application of Article 246 of the Maritime Trade Act in terms of their relation to the subject matter of dispute.

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It is established in the adjudication of this Court that the text in the first and second paragraphs of Article 212 of the Civil Procedure Code provides that “The arbitrator shall deliver his decision without obligation to the pleading procedures except what has been stipulated in this chapter and the procedures concerning the litigant parties’ action and hearing their defense’s aspects, and enabling them to submit their documents, however, the litigant parties may agree on certain procedures according to which the arbitrator should proceed…The arbitrator’s decision shall be according to the rules of the law unless if it were authorized with the reconciliation, then it shall not be obliged with such rules except with those related to the public order.”.

Thus, an award is not obliged to include all the requirements that a court ruling must include, even if the Court requires that the award be given in accordance with the arbitration procedures. It is necessary that the award include, in particular, a photocopy of the arbitration agreement, a summary of the litigants’ statements, evidence, the grounds of the decision, the date and place of the award and the signatures of arbitrators. This means that when the award is to be considered by the Court for ratification, the Court may not discuss the subject matter of the award and the extent to which it conforms to the provisions of law, except with respect to public order.

The Court may only and exclusively consider the procedural aspects set forth in Articles 212 and 216 of the Civil Procedure Code. In this context, the possibility of judicial control over arbitration awards while considering award ratification requests has been enacted by the legislator for the purpose of verifying the legality of the arbitration procedures. Therefore, ratification by the court is limited to verification and establishment that there is no provision or reason preventing the application of the arbitration award in the state. If any such award fulfils the formal elements referred to above, it shall be valid and applicable. In such cases, the court may not investigate the dispute or the validity of the award and may not resolve any other dispute other than the ratification of the award. Having fulfilled all elements mentioned above, the award shall be deemed res judicata.

Accordingly, the present petition to cassation is dismissed.