RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS IN TURKIYE
The recognition and enforcement of foreign arbitral awards in Türkiye is of great importance for the development of international trade and foreign investment. This process is regulated in
Act on International Private and Procedure Law, Turkish Law under Articles 50 to 63 of the International Arbitration Law (“Law”), and international agreements such as the New York Convention of 10 June 1958 on the Recognition and Enforcement of Foreign Arbitral Awards (“Convention”) to which Türkiye has acceded.
1. INTRODUCTION
Recognition and enforcement essentially ensures that foreign judgements are recognised by Turkish law and enforced in Türkiye. Recognition and enforcement procedure must be completed in order for every judgement rendered by foreign courts to be enforceable in Türkiye. Recognition and enforcement decisions may be issued by the courts as a rule. However, as an exception for divorce decisions, administrative authorities have also been authorised for recognition and enforcement since 2017.
According to Article 1 of the Convention, the Convention covers arbitral awards rendered in a state other than the state where recognition and enforcement is sought.
Due to Türkiye’s reservation, the Convention will only be applicable to commercial disputes and to the recognition and enforcement of arbitral awards rendered in countries that are parties to the Convention.
2. RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS
a. Competent and Authorised Court
The competent court for the recognition and enforcement of foreign arbitral awards is the civil court of first instance. The jurisdiction is of public order and shall be observed ex officio at every stage of the proceedings. However, if the foreign arbitral award whose recognition and enforcement is sought is based on a commercial dispute, the Supreme Court accepts that the Commercial Court of First Instance has jurisdiction.1
The competent court for the recognition and enforcement of foreign arbitral awards is the court in the place agreed upon in writing by the parties. In the event that there is no such agreement between the parties the authorized court is the court of the defendant’s domicile in Türkiye, or if there is no domicile, the court of the place where the defendant resides, or if there is no domicile, the court of the place where the defendant’s property that may be subject to enforcement is located. If the defendant does not have enforceable property in Türkiye, Turkish courts will not have jurisdiction over the recognition and enforcement of foreign arbitral awards.
In cases where jurisdiction is not conclusive, the court shall not consider the objection of
1 19. HD 26.1.2007, 2006-11095/451. 1 19. CC 26.1.2007, 2006-11095/45
jurisdiction ex officio. The defendant must file a first objection of jurisdiction within the reply period.
b. Recognition and Enforcement Application
The party seeking recognition and enforcement of a foreign arbitral award shall apply to the competent court with a petition.
Pursuant to Article 61 of Act on International Private and Procedure Law, there are documents that must be attached to the petition. These are;
i. The original or a duly certified copy of the
arbitration agreement or clause
ii. The original or duly certified copy of the
arbitral award duly finalised and
enforceable or binding for the parties,
iii. Translated and duly authenticated copies
of the above-mentioned documents.
In the process of recognition and enforcement of foreign arbitral awards, the award must be translated into Turkish. This translation is done in order to ensure the comprehensibility and legal validity of the award. It is important that the translation is accurate and complete. The translation of arbitral awards should be done by sworn translators.
c. Application Fee
The type of fee to be collected from the party seeking enforcement of foreign arbitral awards is controversial in the doctrine and varies in the decisions of the Supreme Court. As a matter of fact, in the decision of the 19th CC of the Supreme Court dated 15.9.2009 and numbered 5700/8256, it is stated that “the court decision regarding the enforcement of foreign arbitral awards shall be subject to a decision and judgement fee according to the nature of the arbitral award (such as Turkish arbitral awards). In this case, the party requesting the enforcement of the foreign arbitral award shall be charged an application fee and a proportional decision and judgement fee in cases subject to proportional fees. In the concrete case, it is also inappropriate to charge a fixed fee without considering that a proportional fee should be charged.”
In contrast, the decision of the Supreme Court Assembly of Civil Chambers in 2019 is as follows: “Since it is regulated that no proportional fee shall be charged in arbitral awards rendered in Türkiye, it should be accepted that no proportional fee shall be charged in cases of enforcement of foreign arbitral awards. However, since this regulation is related to the proportional fee, a lump sum fee will be charged”. Again, Article 3 of the New York Convention stipulates that “Each Contracting State shall recognise the legitimacy of arbitral awards and shall ensure their enforcement in accordance with the rules of procedure in force in the country in which they are rendered, subject to the conditions set forth in the following articles, provided that neither substantially more onerous requirements nor higher judicial fees shall be imposed for the recognition and enforcement of arbitral awards falling within the scope of this convention than for national arbitral awards.”
d. Bond Requirement for Foreign Plaintiffs
In the event that the plaintiff requesting recognition and enforcement is a foreigner he/she is obliged to provide a guarantee in accordance with Article 48 of the Act on International Private and Procedure Law, and if he/she is a Turkish citizen who does not have a habitual residence in Türkiye, he/she is obliged to provide security in accordance with Article 84 of the Code of Civil Procedure No. 6100. If there is a bilateral or multilateral agreement on exemption from security between Türkiye and the country where the plaintiff has his/her domicile or citizenship, the plaintiff shall be exempt from security.
e. Scope of the Case Review
Convention and ct on International Private and Procedure Law stipulate that the courts may not enter into the merits of the recognition and enforcement of foreign arbitral awards. It is also stated in the decisions of the Supreme Court that the enforcement court cannot examine the merits of the award.2 The court examining the request for enforcement shall examine the issues requiring the rejection of the request for enforcement.
3. CONDITIONS FOR RECOGNITION AND ENFORCEMENT
▪ The award sought to be enforced must be a foreign arbitral award.
▪ The arbitral award must be final and enforceable and not subject to appeal or
annulled.
▪ There must be a valid arbitration agreement between the parties. It is also sufficient to
have an article regarding the arbitration clause in the agreement between the parties.
▪ The party against whom recognition or enforcement of the foreign arbitral award is sought must have been informed of the appointment of the arbitrator or must not have been deprived of the opportunity to present its claims and defences for any other reason.
▪ The dispute must be arbitrable under the law of the enforcement State.
▪ The arbitral award must not be contrary to the public order of the enforcement State.
4. CONCLUSION
Foreign arbitral or court awards must be recognised and enforced in a country other than the country in which they were rendered in order to have result and effect in that country.
2 19. HD. 9.11.2000, 7171/7602 2 19. HD. 9.11.2000, 7171/760
Recognition and enforcement is a unique and critical procedural process and is of vital importance for the enforcement of the foreign award.
