TURKEY Law and Practice Contributed by: Selim Can Bilgin, Tolga Bayrak, H. Orhun Atalay and Arda Ömer Kasap, Kabine Law Office
foreign decision would themselves be contrary to Turkish international public policy. This approach is reflected in the subsequent case law. For example, in a 2022 decision, the Court of Cassa - tion upheld the enforcement of a foreign arbitral award providing for compound interest, which is generally prohibited under Turkish law, subject to limited excep - tions. The Court further held that objections alleging that the tribunal had awarded damages despite the absence of actual loss could not be examined in enforcement proceedings, because such an exami - nation would amount to a review of the merits of the arbitral award under the guise of public policy. 13. Miscellaneous 13.1 Class Action or Group Arbitration Turkish law does not recognise class action arbitration or group arbitration. A party may pursue only its own claims in arbitration and may not seek relief on behalf of a broader class of persons or other third parties. Likewise, arbitral awards bind only the parties to the arbitration agreement and the arbitral proceedings (see 13.5 Binding of Third Parties ). 13.2 Ethical Codes There is no single ethical code specifically governing counsel or arbitrators in international arbitration under Turkish law. The IAL does not establish a comprehen - sive set of professional or ethical standards beyond imposing certain duties on arbitrators, namely the obligations of independence, impartiality and disclo - sure of circumstances giving rise to justifiable doubts as to their independence or impartiality. Counsel admitted to the practice of law in Türkiye remain subject to the applicable rules governing the legal profession, including the Attorneyship Law and the professional rules of the Union of Turkish Bar Associations, when acting before Turkish courts or otherwise practising law in both contentious and non- contentious matters. 13.3 Third-Party Funding Turkish law does not regulate third-party funding in arbitration. Accordingly, such arrangements are gen -
erally regarded as permissible under the principle of freedom of contract, subject to the limits imposed by mandatory rules of law. For example, a funding agreement providing for excessive compensation to the funder may be deemed invalid due to its incom - patibility with public policy. Third-party funding remains relatively uncommon in practice, and there is little, if any, judicial authority addressing its use. As a result, issues such as disclo - sure, conflicts of interest and the role of the funder are primarily governed by general principles of contract law, best practice and, where applicable, the rules of Turkish arbitration institutions. 13.4 Consolidation The IAL does not contain any provisions specifically governing the consolidation of arbitral proceedings. It is nevertheless possible where the parties have agreed to it. In institutional arbitrations, it is usually governed by institutional rules. For example, Article 11 of the ISTAC Arbitration Rules permits consolidation: • where the parties to arbitration proceedings are dif - ferent, if all parties consent to consolidation; or • where the parties to the proceedings are the same: (a) if the parties consent to consolidation; or (b) if the claims arise out of the same arbitration agreement; or (c) where based on multiple arbitration agree - ments, if the disputes arise out of the same legal relationship and the arbitration agree - ments are compatible. 13.5 Binding of Third Parties As a general rule, arbitral awards bind only the par - ties to the arbitration and cannot be enforced against third parties. Turkish courts have no power to extend the binding effect of an arbitral award to a person or entity that is not bound by the arbitration agreement. A non-signatory may nevertheless be bound by an arbitration agreement, and therefore the arbitral award, in the limited exceptional circumstances under Turkish law (see 5.6 Jurisdiction Over Third Parties ).
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