In the important phase of selecting arbitrators, which enables arbitration procedure to commence healthily and continue, The Turkish International Arbitration Law of 2001 (“TIAL”) confers freedom to parties as to qualifications, nationality, authority and the number of arbitrators, as long as it is an odd number.
By Abdülkadir Güzeloğlu & Fatma Esra Güzeloğlu
25 May 2016
In the important
phase of selecting arbitrators, which enables arbitration procedure to commence
healthily and continue, The Turkish International Arbitration Law of 2001
(“TIAL”) confers freedom to parties as to qualifications, nationality,
authority and the number of arbitrators, as long as it is an odd number.
TIAL also allows parties to designate a specific person in the arbitration
agreement. However, if that person does not accept their nomination,
resigns or becomes unavailable for any legal or factual reason, and where
parties did not consent on the appointment of a substitute arbitrator, TIAL
states that the arbitration procedure is to be terminated and proceedings
before a competent state court are to be initiated. In this vein, the
Supreme Court further expressed that in such circumstances the validity of the
arbitration agreement, in other words, parties’ will to arbitrate, is alive
only if the specifically selected person acts as the arbitrator.
It must be added that
if the appointment mechanism devised by the parties fails, upon request of a
party, the commercial court of first instance is authorized to appoint an
arbitrator or the tribunal, its decision being final.
Before accepting an
appointment, TIAL articulates that a prospective arbitrator must disclose any
circumstances which might raise justifiable doubts regarding the arbitrator’s
impartiality or independence. Then, an arbitrator must also disclose any
circumstances which arise after commencement of proceedings and which parties
are unaware of.
Arbitrators may be
challenged on the following grounds: if they do not meet with the
qualifications that the parties have decided; if reasonable doubts emerge as to
their independence and impartiality; or other grounds of challenge consented to
by the parties take place.
TIAL allows parties
to freely designate the procedure for challenging the arbitrators. If
such agreement is absent, the challenging party must send a written statement
including the reasons for the challenge to the other party within 30 days of
the constitution of the tribunal or appointment of the arbitrator, or within 30
days of noticing circumstances that incite the challenge. Also, the party
who seeks to challenge one or more arbitrators must initially notify the
tribunal. If the tribunal rejects the challenge, the dissatisfied party
may start proceedings before the competent court within 30 days of receipt of
the decision, in order to have the decision annulled and challenge
arbitrators. However, if a sole arbitrator, the tribunal or arbitrators
who represent voting majority, is to be challenged, the commercial court of
first instance is the only competent court. The latter’s judgment on the
matter shall be final and binding.
Under TIAL, unless
otherwise agreed by the parties, an arbitrator is liable for the loss caused by
his unjustifiable failure to perform duties assigned to him. Also, the
succeeding subparagraph states that if existent legal conditions forestall an
arbitrator to fulfil his duties, then his mandate can be terminated upon
voluntary withdrawal of the arbitrator or agreement of the parties. While
Turkish law reflects the prevailing stance by qualifying the relationship
between the arbitrators and the parties as contractual, it requires an
arbitrator to intentionally or negligently inflict damage on parties in order
for him to be liable.
For further
information on international
arbitration and Turkish
arbitration practice, please contact us at info@guzeloglu.legal.
This article first appeared in the second Edition of Global Legal Insights–International Arbitration; published by Global Legal Group Ltd, London.