An Evaluation of Setting Aside of Arbitral Awards on Turkish International Arbitration Code

Abstract

Under Turkish law, arbitration involving foreign elements is regulated under Turkish International Arbitration Code 4686, which solely addresses setting aside arbitral awards. In this action, parties file cases before the local court based on the Code's numerus clausus grounds for setting aside of arbitral awards; if the case is accepted by the local court, the award is partly or entirely annulled. In accordance with the policy of setting aside such an award, the trial restarts before either an arbitral tribunal or a local court, which markedly increases judicial costs in addition to wasting. On the one hand, broad interpretation of the grounds for setting aside arbitral awards could increase the number of such awards that are annulled, which could interfere with and impede Turkey's goal of becoming an attractive hub for arbitration. On the other hand, an arbitration system with no system for annulment could allow for enforcement of unjust arbitral awards. Therefore, determining clear boundaries for both the grounds and the procedure for setting aside arbitral awards is crucial. In this study, Turkish International Arbitration Code is compared with both the UNCITRAL Model Law on International Commercial Arbitration (1985) and Switzerland's Federal Code on Private International Law, which are the sources of Turkey's code to assess differences in the regulations.