With its aspiration to become an international arbitration venue, Turkey enacted new legislation on November 29, 2014 in order to establish the Istanbul Arbitration Center. With the establishment of its own arbitration center, the number of arbitration proceedings in Turkey is expected to increase substantially. It is inevitable that the increase in the number of arbitration proceedings will result in an increase in the number of set-aside lawsuits.
Although it has been more than ten years since the concept of setting aside an arbitral award was introduced in Turkey, Turkish courts are still developing their approach towards the grounds for setting aside an arbitral award, due to the distinct nature of arbitration. In an effort to show the Turkish courts’ approach towards the most invoked set-aside grounds, this article aims to underline the general approach adopted by the courts of first instance of Turkey’s two largest cities – Istanbul and Ankara – based on their decisions since 2012.
I. OVERVIEW OF SET-ASIDE LAWSUITS IN TURKEY
A. Applicable Procedural Law
There are two laws that govern arbitration proceedings in Turkey: the Civil Procedure Law (the “CPL”) and the Turkish International Arbitration Law (the “IAL”). There are three types of arbitral awards: (i) a CPL-based arbitral award; (ii) an IAL-based arbitral award; and (iii) a foreign arbitral award. In the presence of a CPL-based or an IAL-based arbitral award, judgment debtors can challenge the award by filing an application to set it aside.