TURKEY Law and Practice Contributed by: Selim Can Bilgin, Tolga Bayrak, H. Orhun Atalay and Arda Ömer Kasap, Kabine Law Office
5. Jurisdiction 5.1 Challenges to Jurisdiction
The IAL lays down other specific rules governing juris - dictional objections: • A party does not lose its right to raise such an objection merely because it participated in the appointment of an arbitrator or the arbitral tribunal. • Jurisdictional objections are decided by the tribu - nal as a preliminary matter. 5.4 Standard of Judicial Review for Jurisdiction/Admissibility Consistent with the principle that Turkish courts may not review the substance of an arbitral award ( révision au fond ), the courts’ judicial review for questions of admissibility and jurisdiction is limited to the jurisdic - tional grounds recognised under the IAL. That said, in order to determine whether the arbitral tribunal correctly accepted or declined jurisdiction, the reviewing court may examine the factual and legal circumstances relevant to the jurisdictional objection to the extent necessary for resolving the jurisdictional issue, including the existence, validity and scope of the arbitration agreement and whether the factual and legal basis of the claims falls within the arbitra - tion agreement. The courts do not, however, review the merits of the underlying dispute beyond what is required for that purpose. 5.5 Breach of Arbitration Agreement As per Article 116 of the CCP, Turkish courts must and do take into account arbitration agreements and dismiss cases on procedural grounds where there is a valid and binding arbitration agreement governing the same dispute, and a party invokes the arbitration agreement as a preliminary objection in its statement of defence (see 3.3 National Courts’ Approach ). 5.6 Jurisdiction Over Third Parties In general, Turkish law adopts a restrictive approach to the extension of arbitration agreements to non- signatories. The principle of privity applies, meaning that an arbitration agreement binds only its parties. In addition, the statutory requirement that an arbitration agreement be concluded in writing as a condition of validity makes the extension of arbitration agreements to third parties more difficult.
Article 7 (H) of the IAL empowers the arbitral tribunal to rule on its own jurisdiction, including any objections concerning the existence or validity of the arbitration agreement. In other words, the IAL expressly recog - nises the principle of competence-competence. 5.2 Circumstances for Court Intervention Parties cannot apply to Turkish courts to determine the jurisdiction of an arbitral tribunal. The tribunal itself is empowered to rule on its own jurisdiction in accord - ance with the principle of competence-competence. Judicial review of jurisdictional issues arises primar - ily in setting-aside proceedings, whereby the courts can set aside an arbitral award if “the arbitral tribunal unlawfully ruled that it had, or did not have, jurisdic - tion” as per Article 15 of the IAL. Accordingly: • Where the arbitral tribunal has upheld its jurisdic - tion and rendered an award, the respondent may seek to have the award set aside under Article 15 of the IAL on the ground that the tribunal wrongly accepted jurisdiction or decided matters falling outside the scope of the arbitration agreement. Jurisdictional rulings embodied in a partial award are also subject to judicial review. • Conversely, where the tribunal declines jurisdic - tion and terminates the proceedings, that negative jurisdictional ruling may likewise be challenged through a setting-aside action. If the court con - cludes that the tribunal wrongly declined jurisdic - tion, it may set aside the award. 5.3 Timing of Challenge Pursuant to Article 7 (H) of the IAL, an objection that the arbitral tribunal lacks jurisdiction must be raised no later than the submission of the statement of defence. An objection that the tribunal has exceeded the scope of its jurisdiction must be raised without delay after the relevant issue arises during the proceedings. In both cases, the tribunal may admit a late objection if it considers that the delay was justified.
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