Arbitration is a commonly used alternative dispute resolution method under Turkish law, especially in commercial disputes. It is regulated under Articles 407 to 444 of the Turkish Code of Civil Procedure No. 6100 (“Code No. 6100”). It is an alternative procedure that allows parties to resolve their disputes with the help of neutral arbitrators, rather than in court. Involving a different procedure than in state courts, arbitration is divided into two categories: voluntary and mandatory. Voluntary arbitration is based on the free will of the parties, offering them the opportunity to resolve their dispute through arbitration instead of bringing it to court. In mandatory arbitration, on the other hand, the parties do not have the option of taking their dispute to a court and must resort to arbitration.
The parties should conclude an arbitration agreement to be able to arbitrate. Article 412 of Code No. 6100 defines an arbitration agreement as an agreement between the parties to resolve their existing or future disputes arising out of contractual or non-contractual legal relations before an arbitrator or arbitral tribunal.
In some cases, arbitration may require the assistance of a court. These cases are clearly defined in the relevant law. As per the law regulating arbitration, cases requiring recourse to the general courts include the following: selection of arbitrators, interim measure requests, collection of evidence, annulment actions, and reopening of proceedings.
Appointment of Arbitrators and Competency of the Court
An arbitrator is a natural person authorized to resolve a dispute through arbitration (Art. 416/1-a, Code No 6100; Art. 5, International Arbitration Act No. 4686 (“Act No. 4686”). Accordingly, an arbitrator should:
- Be a natural person,
- Have the capacity to act,
- Not be a party or their representative.
As arbitration is a legal procedure, arbitrators must be independent and impartial. Otherwise, the parties may challenge the arbitrator. Therefore, there should be no connection or conflict of interest between the arbitrator and the parties. If this is the case, the arbitrator must inform the parties immediately.
The parties are free to determine the number of arbitrators (Art. 415, Art. 416, Code No. 6100; Art. 5, Act No. 4686). However, the number must be an odd number. When the parties are unable to agree on the number of arbitrators, three arbitrators will be appointed. In the case of several arbitrators, at least one of them must have a minimum of 5 years of experience in the legal profession.
The role of the court in the selection of arbitrators is as follows:
- If a single arbitrator is to be appointed and the parties are unable to agree on the arbitrator, the arbitrator will be appointed by the court upon request of a party.
- If three arbitrators are to be appointed, each party will select one arbitrator, and the two arbitrators thus selected will decide on the third arbitrator. However, if a party fails to appoint an arbitrator within one month after receiving the other party’s request for the appointment of an arbitrator, or if the two arbitrators thus appointed fail to select a third arbitrator within one month of their appointment, the third arbitrator will be appointed by the court.
Temporary Legal Protection Measures in Arbitration
Interim measures, interim attachments, and evidence preservation may be ordered as temporary legal protection measures in arbitration. However, national arbitration and international arbitration differ from each other in terms of the circumstances under which these measures may be enforced, as well as the enforcing parties and the time of enforcement. In national arbitration, interim measures and evidence preservation are regulated under Articles 414 and 426/2 of Code No. 6100, and in international arbitration, interim measures and interim attachments are regulated under Articles 6 and 10-A/2 of Act No. 4686.
In a dispute subject to an arbitration agreement, the arbitrator or the arbitral tribunal may order interim measures and evidence preservation as temporary legal protection measures within the framework of national arbitration (Art. 414, Code No. 6100). Other requests for interim measures should be filed with general courts. In international arbitration, the arbitrator or the arbitral tribunal may grant not only an interim measure but also an interim attachment.
In national arbitration, if the arbitrator or the arbitral tribunal or the parties’ appointee is unable to act in a timely or effective manner, a party may apply to the court for an interim measure or the preservation of evidence. Otherwise, applications to the court are only possible with the permission of the arbitrator or the arbitral tribunal or upon the written agreement of the parties (Art. 414/3, Code No. 6100). Depending on the specific arbitration proceedings, interim measures granted by the general courts automatically become null and void upon the final arbitral award becoming enforceable or the dismissal of the action, unless otherwise provided (Art. 414/4 of Code No. 6100; Art. 6/5 of Act No. 4686).
Collection of Evidence and Submission of Documents
Article 12/B in Act No. 4686 stipulates, “The parties shall provide their evidence within the term that is determined by the arbitrator or the arbitral tribunal. The arbitrator or the arbitral tribunal may request assistance from the court of first instance in collecting evidence. In such case, the court shall apply the provisions of the Code of Civil Procedure.”
Accordingly, if the arbitral tribunal needs assistance in the collection of evidence and the submission of documents, it may ask the court to render a decision in this respect. However, in this case, the applicable law will no longer be Act No. 4686, but Code No. 6100.
Under Article 220(3) of Code No. 6100, if the party ordered by the court to submit a document fails to submit it within the relevant timeframe without a valid reason, the court will be entitled to decide whether to accept the other party’s statements as to the content of the document.
Legal Remedies Against Arbitral Awards
Arbitral awards are final judgments like the judgments of state courts, being enforceable through the state’s enforcement bodies, if necessary. Therefore, arbitral awards must be rendered in accordance with the fundamental principles of procedural law. In order to subject arbitral awards to judicial review, an annulment action may be filed in court. However, the grounds for annulment are limited to the cases specified in the law. Accordingly, the annulment of arbitral awards may not be requested except for the cases listed in Article 439 of Code No. 6100.
Arbitral awards are reviewed in two stages: First, an annulment action may be filed against the arbitral award and then the court decision rendered in the annulment action may be appealed. This situation is regulated under Article 439/6 of Code No. 6100 as follows: “The decisions rendered in annulment actions may be appealed. The appellate review, limited to the grounds for annulment set forth in this Article, shall be decided with priority and urgency. An appeal does not stay the enforcement of a decision.“
The subject matter of an annulment action will be the arbitral award rendered at the end of arbitration. The decisions that can be annulled are final decisions or partial or provisional final decisions. On the other hand, annulment actions may not be filed against interim decisions that arise during the arbitration process with regard to procedural or substantive law.
Reopening of Proceedings in Arbitration
Reopening of proceedings is regulated as an extraordinary remedy in arbitration (Art. 443, Code No. 6100). The provisions on the reopening of proceedings in state procedures may also be applicable in arbitration proceedings, where appropriate. However, these proceedings are adjudicated in court rather than in arbitration. If the court finds that the plaintiff’s claim is justified, it will set aside the arbitral award and refer the case to a new arbitrator or arbitral tribunal to settle the dispute.
Conclusion
Arbitration is a fast and effective alternative dispute resolution method founded upon the free will of the parties, especially common in commercial disputes. With more flexible procedural rules than state proceedings, arbitration allows parties to reach a fair and binding settlement of their dispute with the help of professional arbitrators. However, arbitration is not a completely independent legal procedure and is open to state courts’ oversight and intervention under certain circumstances.
For instance, the courts are still competent in matters such as the appointment of arbitrators, the application of temporary legal protection measures, the preservation of evidence and the review of arbitral awards to a certain extent to ensure the legal certainty of arbitration. The possibility of filing annulment actions and reopening proceedings against arbitral awards ensures the legality of arbitral awards. Still, the fact that these remedies are provided for certain cases maintains the finality and bindingness of arbitral awards.
Within this framework, a well-balanced relationship with the courts is necessary to sustain arbitration as an effective and reliable dispute resolution method. When the legal boundaries between arbitration and state courts are clearly defined, the parties may benefit from a more reliable arbitration process supported by judicial review mechanisms.
Att. Gizem Sadak
