Nationality of the Arbitral Awards 5 July 2017

In order to enforce foreign arbitral awards in Turkey, recognition and/or enforcement of the arbitral awards should be requested by filing a case before Turkish courts. Contrarily, local arbitral awards do not require any additional recognition and/or enforcement decision from Turkish courts to be enforceable in Turkey. In other words, local arbitral awards are directly enforceable in Turkey as of the date of rendering of the decision. Therefore, it is important to determine whether an arbitral award is foreign or local.

The legislation does not provide any regulation with respect to the determination of the nationality of the arbitral awards. Therefore, different criteria are accepted in practice, such as the nationality of the parties, the nationality of the arbitrators or the place of the verdict. However, the Supreme Court Assembly of Civil Chambers has regulated this issue with its decision dated 07.11.1951 and numbered 126/109 in which it is stated that “an arbitral award which is given under a foreign arbitral authority shall be considered as a foreign arbitral award”. However, the concept of “foreign arbitral authority” has not been explained in the respective decision of the Supreme Court.

Accordingly, some academicians claimed that if the substantial law which is the basis to the arbitral award is foreign law, then the arbitral award should be considered as a foreign arbitral award. However, others have suggested that if the procedural law which is applied in the arbitration is foreign procedural law, then the arbitral award should be considered as a foreign arbitral award.

At this point, the Supreme Court has clarified this confusion by stating that “as it is stated in previous Supreme Court decisions, an arbitral award which is given under a foreign arbitral authority shall be considered as a foreign arbitral award and not the substantial law but the procedural law applied in the arbitration should be considered in order to determine if an arbitral award is given under a foreign arbitral authority” (Supreme Court 11. Civil Chamber, 28.12.1978, 5258E/5916K; 15. Civil Chamber, 20.06.1996, 2781E/2533K).

However, the Supreme Court has various decisions regarding which procedural law shall be considered as foreign procedural law, as in some cases the Supreme Court does not accept International Chamber of Commerce (“ICC”) arbitral awards as foreign arbitral awards. The 15^th Chamber of Supreme Court has ruled in its decision dated 06.11.1998 and numbered 1998/3507 E, 1998/4108 K, that

“In the present case, arbitrators are Turkish nationals, the arbitration has taken place in Turkey and the decision has been given in Turkey. Therefore, since there is not any element of foreignness, the arbitral award shall be considered as local arbitral award although the parties have accepted the application of ICC Rules of Arbitration in the arbitration”, which means that if the parties and arbitrators are Turkish nationals and the arbitration takes place in Turkey, the arbitral award shall be considered as a local arbitral award although ICC Rules of Arbitration is applied. Therefore, in such cases, there is no need to have a decision of recognition and/or enforcement in order to enforce such arbitral award in Turkey, as the arbitral award will be considered as a local arbitral award.

Türkçe Versiyonu İçin

http://www.kasaroglu.av.tr/tr/31236/Hakem-Kararlarinin-Milliyeti

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