TURKEY Law and Practice Contributed by: Selim Can Bilgin, Tolga Bayrak, H. Orhun Atalay and Arda Ömer Kasap, Kabine Law Office
sary. In recent years, the Court of Cassation has inter - preted the public policy exception narrowly and has generally adopted an arbitration-friendly approach that respects the prohibition on reviewing the merits of the case. For example, in a 2022 decision, the Court of Cassation held that whether a contractual penalty was excessive could not be reviewed under the guise of public policy, as doing so would amount to review of the merits of the arbitral award.
stitutes a ground for refusing recognition and enforce - ment. Likewise, although Article V(1)(e) of the New York Convention confers discretion on the enforcing court, Turkish courts generally refuse to recognise or enforce awards that have been set aside at the seat of arbitration. With respect to awards governed by the IAL, the com - mencement of setting-aside proceedings automati - cally suspends enforcement. By contrast, under the CCP, the filing of a setting-aside action does not auto - matically stay enforcement, although the court may order a stay upon the provision of security. Sovereign Immunity Turkish law adopts the restrictive doctrine of state immunity, since, by virtue of Article 49 (1) of the IPPL, a foreign state does not enjoy jurisdictional immunity in disputes arising from private-law relations. Accord - ingly, a foreign state may not invoke sovereign immu - nity in recognition or enforcement proceedings arising out of private-law or commercial relationships merely by virtue of its status as a sovereign. This distinction also applies at the recognition stage, so a foreign state cannot defeat recognition merely by invoking jurisdic - tional immunity. 12.3 Approach of the Courts The recent case law of the Court of Cassation dem - onstrates a restrained approach to judicial review of foreign arbitral awards. A significant turning point was the 2012 Decision of the Court of Cassation’s General Assembly on the Uni - fication of Judgments (Case No. 2010/1, Decision No. 2012/1, dated 10 February 2012), examining how to assess “public policy” as a condition for enforcement of foreign court decisions. However, its reasoning is equally relevant to the enforcement of foreign arbitral awards, as Turkish law recognises the same public policy ground for refusing enforcement of the latter. In its Decision, the Court made clear that recognition or enforcement cannot be refused merely because the foreign decision applies a law different from Turkish law or reaches a result inconsistent with mandatory provisions of Turkish law. Rather, refusal is justified only where the legal consequences of enforcing the
12. Enforcement of an Award 12.1 New York Convention
Türkiye is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) subject to both the reciprocity and commercial reservations. Accordingly, the recognition and enforcement of foreign arbitral awards in Türkiye are primarily governed by the New York Convention, but for only those rendered in the territory of another Contracting State and for disputes that are regarded as commercial under Turkish law. The IPPL governs the matters that fall outside of the Arbitral awards rendered under the IAL or CCP do not require recognition or enforcement proceedings in order to be enforced in Türkiye. Once the award has become enforceable under the applicable legislation, it may be enforced directly upon obtaining an enforce - ability certificate ( icra edilebilirlik şerhi ) from the court, which is a straightforward procedure. By contrast, foreign arbitral awards, namely awards rendered in arbitrations not governed procedurally by Turkish laws, must undergo exequatur ( tenfiz ) pro - ceedings before the Turkish courts. Such proceedings are governed primarily by the New York Convention, where applicable, and if not, by the IPPL. Effect of Setting-Aside Proceedings Before the Courts in the Seat of Arbitration Under Article 62 (1)(h) of the IPPL, the setting aside of a foreign arbitral award at the seat of arbitration con - scope of New York Convention. 12.2 Enforcement Procedure In General
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