TURKEY Law and Practice Contributed by: Selim Can Bilgin, Tolga Bayrak, H. Orhun Atalay and Arda Ömer Kasap, Kabine Law Office
to the allocation and recovery of legal costs, and that the tribunal had acted within that authority. Also, the “costs follow the event” rule is not manda - tory. As is clear from the wording of the relevant pro - vision, the parties remain free to agree on a different allocation of costs, either directly or by adopting insti - tutional arbitration rules containing specific provisions on costs. In such cases, the parties’ agreement or the applicable institutional rules will prevail. Turkish law also permits arbitral tribunals to award interest where it is claimed and justified under the applicable substantive law. Arbitral awards rendered under the IAL are not subject to appeal on the merits. The only recourse against an award is an action for setting aside before the compe - tent regional court of appeal. The grounds for setting aside are exhaustively listed in Article 15 of the IAL. A party may seek to have an award set aside by estab - lishing that: • a party to the arbitration agreement lacked capac - ity, or the arbitration agreement was invalid under the law chosen by the parties or, failing such choice, under Turkish law; • the arbitral tribunal was not constituted in accord - ance with the parties’ agreement or the IAL; • the award was not rendered within the applicable time limit; • the tribunal wrongly accepted or declined jurisdic - tion; • the tribunal decided matters falling outside the scope of the arbitration agreement, failed to decide all claims, or exceeded its authority; • the arbitral procedure was not conducted in accordance with the parties’ agreement or, in the absence of such agreement, the IAL, and this affected the substance of the award; or • the principle of equality of the parties was not observed. 11. Review of an Award 11.1 Grounds for Appeal
In addition, the regional court of appeal will examine ex officio whether the dispute is arbitrable under Turk - ish law and whether the award is contrary to Turkish public policy. The grounds for setting aside are exhaustive, and the prohibition of review of the merits ( révision au fond ) bars any reassessment of the tribunal’s findings on the merits. 11.2 Excluding/Expanding the Scope of Appeal Turkish law permits parties to waive their right to seek the setting aside of an arbitral award, but only for the parties that are domiciled or habitually resident out - side Türkiye. Under Article 15 of the IAL, such parties may waive, in whole or in part, their right to bring a setting-aside action, and such waiver must be made expressly, either in the arbitration agreement or in a subsequent written agreement. Waiver of right to bring a setting-aside action is, however, subject to important limitations. It does not preclude judicial review of matters that the court examines ex officio, namely whether the dispute is arbitrable under Turkish law and whether the award is contrary to Turkish public policy. Therefore, even where a party has validly waived its right to bring a setting-aside action, it may still initiate setting-aside proceedings, but solely on the grounds of arbitrability and Turkish public policy. The parties may not expand the scope of judicial review. The grounds for setting aside set out in Article 15 of the IAL are exhaustive, and Turkish law does not permit the parties to agree on additional grounds for challenging an arbitral award. 11.3 Standard of Judicial Review Judicial review is limited, and prohibition of review of the merits ( révision au fond ) applies under Turkish law. Turkish courts exercise only supervisory review based on the exhaustive setting-aside grounds in Article 15 of the IAL and do not review the merits of the dispute. Only in exceptional cases, particularly when assessing public policy, may the court examine aspects of the substance of the award, and only to the extent neces -
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