Research Article


DOI :10.26650/ppil.2019.39.1.0017   IUP :10.26650/ppil.2019.39.1.0017    Full Text (PDF)

Review of the Validity of the Arbitration Agreements by Turkish Courts in Cases Where the Seat of Arbitration is in a Foreign Country and the Applicable Law

Esen Aydın

The scope of the review held by the courts in cases where a dispute subject to arbitration is brought before a court are discussed in the first part of our study, by paying particular attention to cases where seat of arbitration is in a foreign country. In the case on the merits of the dispute, the respondent can raise an arbitration objection and the claimant can assert that the arbitration agreement is invalid. Subsequent to relevant objections, first the scope of the review held by the court should be identified. The review can be prima facie, serving the purpose to determine if there is an existing arbitration agreement or the court can opt for a broad review and determine the validity of the arbitration agreement. The importance of choosing a foreign seat and the effects of this choice on the scope of the review are discussed in our study. In cases where the courtreviewsthe validity of the arbitration agreement, the law applicable to the arbitration agreement should be determined and this issue is discussed in the second part of our study. When the seat of arbitration is in a foreign country, there is a gap in Turkish law regarding the law applicable to the arbitration agreement. The opinions put forward in the doctrine as to how to fill this gap are evaluated.

DOI :10.26650/ppil.2019.39.1.0017   IUP :10.26650/ppil.2019.39.1.0017    Full Text (PDF)

Yabancı Bir Devletin Tahkim Yeri Olarak Kararlaştırıldığı Hallerde Tahkim Anlaşmasının Geçerliliğine İlişkin Türk Mahkemelerinin Yapacağı İnceleme ve Uygulanacak Hukuk

Esen Aydın

Çalışmamızın ilk bölümünde, yabancı bir devletin tahkim yeri olarak belirlendiği hallerde, tahkime tabi bir uyuşmazlığın devlet mahkemesine götürülmesi ve buna yapılan itirazlar üzerine mahkemece yapılacak olan inceleme ele alınmıştır. Davalı, esasa ilişkin açılan davada tahkim itirazı ileri sürebilir ve davacı da tahkim anlaşmasının geçersiz olduğunu iddia edebilir. Söz konusu iddialar üzerine, önceliklemahkemenin tahkimanlaşmasının geçerliliği hakkında yapacağı incelemenin kapsamının belirlenmesi gerekmektedir. Bu inceleme prima facie düzeyde, sadece mevcut bir tahkim anlaşmasının bulunup bulunmadığına ilişkin olabileceği gibi, mahkeme tahkim anlaşmasının geçerli olup olmadığını detaylı biçimde inceleyerek karara da bağlayabilir. Yabancı bir devletin tahkim yeri olarak belirlendiği hallerde özellik arz eden durumlar ve bu hususun incelemenin kapsamı üzerindeki etkileri çalışmamızda ele alınmıştır. İkinci bölümde ise mahkemenin tahkim anlaşmasının geçerliliğini inceleyip kararlaştıracağı hallerde incelemenin hangi hukuka göre yapılacağı değerlendirilmiştir. Yabancı bir devletin tahkim yeri olarak belirlendiği hallerde, tahkim anlaşmasının geçerliliğine uygulanacak hukuk hususunda Türk hukukunda boşluk söz konusudur. Bu boşluğun ne şekilde doldurulabileceğine ilişkin olarak doktrinde ileri sürülen görüşlere yer verilmiştir.


EXTENDED ABSTRACT


The subject of our study is an action brought to state courts regarding a dispute subject to arbitration and the determination of parties’ objections related to arbitration. The respondent may raise an arbitration objection in the case appearing before the state court and the claimant may plead that the arbitration agreement is invalid. On these claims, it is important to determine the scope of the review to be carried out by the court. Before going into the scope of the review, it’s important to address briefly the relevance of a foreign seat and its effects according to Turkish arbitration law. An important result of the determination of a foreign state as the seat of arbitration under Turkish law is that the dispute would fall outside of the scope of the Code on International Arbitration No. 4686. However, in cases where a foreign state is designated as the seat of arbitration, the International Arbitration Code art. 5 regulating the arbitration objection will be applied to the dispute. IAC art. 5 stipulates that if an action is brought before the court in a matter which is subject to an arbitration agreement, the respondent may object to the jurisdiction of the court. The acceptance or refusal of the objection and disputes concerning the validity of the arbitration agreement are subject to the provisions of the Civil Procedure Code regarding the preliminary objections. If such objection is accepted, then the court shall dismiss the action on procedural grounds. Although it is accepted in the article that the court will dismiss the action in case of a valid arbitration agreement, detailed provisions regarding the standard of the review and the validity of the arbitration agreement are not included. Two main opposite views have been accepted in the doctrine regarding the scope of the review. According to the first group of authors the court should, determine the validity of the arbitration agreement after a full review and in case of a valid arbitration agreement, refer the dispute to arbitration. And according to the second view, the court should only look for an arbitration agreement, thus carry out a prima facie review and in case of the existence of an arbitration agreement, refer the dispute to arbitration. In this case, the arbitral tribunal shall have the competence to decide on its own jurisdiction according to the principle of Competence-Competence. It’s important to determine which standard of review should be adopted by Turkish courts when the seat of arbitration is in a foreign country. UNCITRAL Model Law art. 8, 1958 New York Convention art. II/3, Civil Procedure Law art. 422 all include the provision that unless the arbitration agreement is “null and void, inoperative and incapable of being performed” the dispute should be referred to arbitration. It can be deduced from the wording of these articles that the court should carry out a full review and determine the validity of the arbitration agreement. In the doctrine and in the jurisprudence of Swiss courts, it is agreed that the court should decide whether the arbitration agreement is valid in cases where the seat of arbitration is in a foreign state. It is emphasized that otherwise the principle of natural judge would be violated. After determining the scope of the review, the law applicable to the validity of the arbitration agreement is examined in the second part of the study. According to the article 4 of the International Arbitration Code, “The validity of the arbitration agreement is subject to the law agreed by the parties, failing such agreement to Turkish Law.” This article provides for the law applicable to the arbitration agreement, however it cannot be applied where the seat of arbitration is in a foreign country. As there is no other rule or provision regulating the applicable law when the seat is in a foreign country, there is a legal gap in Turkish law regarding this matter. Several views and methods have been put forward in the doctrine on how to fill the gap regarding the law applicable to the arbitration agreement. According to the first view, Article 4 of the International Arbitration Code should be applied by analogy and Turkish law should be applied to the arbitration agreement. The second view also applies Article 4 by analogy however the authors consider that the underlying principle of this article is the “seat of arbitration” and state that the law applicable should be the law of the seat. It is also argued that the applicable law can be determined by application by analogy of the article V/1/a of the New York Convention. And finally, the law applicable to the arbitration agreement can be determined according to the conflict of law rules on the law applicable to the contracts, thus article 24 of the Code on Private International Law and International Procedure Law. In our opinion, it is possible to fill this gap with the application of the provisions of the Code on Private International Law and International Procedure Law, which contains general rules regarding the disputes including a foreign element. In cases where there is no provision in the lex specialis, namely the Code on International Arbitration, it is possible to refer to the aforementioned Code. Article 62/f of the Code on PIL which regulates the recognition and enforcement of foreign arbitration awards can be applied by analogy. According to this article, the law applicable to the validity of the arbitration agreement is subject to the law designated by the parties, or in the absence thereof, to the law of the place where the arbitral award is rendered. Thus, in the absence of any choice of law by the parties, the law of the seat of arbitration should apply


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APA

Aydın, E. (2019). Review of the Validity of the Arbitration Agreements by Turkish Courts in Cases Where the Seat of Arbitration is in a Foreign Country and the Applicable Law. Public and Private International Law Bulletin, 39(1), 33-61. https://doi.org/10.26650/ppil.2019.39.1.0017


AMA

Aydın E. Review of the Validity of the Arbitration Agreements by Turkish Courts in Cases Where the Seat of Arbitration is in a Foreign Country and the Applicable Law. Public and Private International Law Bulletin. 2019;39(1):33-61. https://doi.org/10.26650/ppil.2019.39.1.0017


ABNT

Aydın, E. Review of the Validity of the Arbitration Agreements by Turkish Courts in Cases Where the Seat of Arbitration is in a Foreign Country and the Applicable Law. Public and Private International Law Bulletin, [Publisher Location], v. 39, n. 1, p. 33-61, 2019.


Chicago: Author-Date Style

Aydın, Esen,. 2019. “Review of the Validity of the Arbitration Agreements by Turkish Courts in Cases Where the Seat of Arbitration is in a Foreign Country and the Applicable Law.” Public and Private International Law Bulletin 39, no. 1: 33-61. https://doi.org/10.26650/ppil.2019.39.1.0017


Chicago: Humanities Style

Aydın, Esen,. Review of the Validity of the Arbitration Agreements by Turkish Courts in Cases Where the Seat of Arbitration is in a Foreign Country and the Applicable Law.” Public and Private International Law Bulletin 39, no. 1 (Mar. 2024): 33-61. https://doi.org/10.26650/ppil.2019.39.1.0017


Harvard: Australian Style

Aydın, E 2019, 'Review of the Validity of the Arbitration Agreements by Turkish Courts in Cases Where the Seat of Arbitration is in a Foreign Country and the Applicable Law', Public and Private International Law Bulletin, vol. 39, no. 1, pp. 33-61, viewed 4 Mar. 2024, https://doi.org/10.26650/ppil.2019.39.1.0017


Harvard: Author-Date Style

Aydın, E. (2019) ‘Review of the Validity of the Arbitration Agreements by Turkish Courts in Cases Where the Seat of Arbitration is in a Foreign Country and the Applicable Law’, Public and Private International Law Bulletin, 39(1), pp. 33-61. https://doi.org/10.26650/ppil.2019.39.1.0017 (4 Mar. 2024).


MLA

Aydın, Esen,. Review of the Validity of the Arbitration Agreements by Turkish Courts in Cases Where the Seat of Arbitration is in a Foreign Country and the Applicable Law.” Public and Private International Law Bulletin, vol. 39, no. 1, 2019, pp. 33-61. [Database Container], https://doi.org/10.26650/ppil.2019.39.1.0017


Vancouver

Aydın E. Review of the Validity of the Arbitration Agreements by Turkish Courts in Cases Where the Seat of Arbitration is in a Foreign Country and the Applicable Law. Public and Private International Law Bulletin [Internet]. 4 Mar. 2024 [cited 4 Mar. 2024];39(1):33-61. Available from: https://doi.org/10.26650/ppil.2019.39.1.0017 doi: 10.26650/ppil.2019.39.1.0017


ISNAD

Aydın, Esen. Review of the Validity of the Arbitration Agreements by Turkish Courts in Cases Where the Seat of Arbitration is in a Foreign Country and the Applicable Law”. Public and Private International Law Bulletin 39/1 (Mar. 2024): 33-61. https://doi.org/10.26650/ppil.2019.39.1.0017



TIMELINE


Submitted03.05.2019
Last Revision27.05.2019
Accepted28.05.2019

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