One of the most important challenges in international area is, to enforce decisions which are decided by foreign countries’ courts or foreign arbitration awards when the opposing party is a foreign legal entity or foreign real person.
The topic of ‘Enforcement of foreign court decisions’ has been arranged in the Turkish Code of International Private and Civil Procedure Law numbered 5718. To enforce final judgments about civil lawsuits which are decided by foreign courts and finalized aforesaid countries’ laws, is conditioned to have Turkish courts’ decision for enforcement. Also, it is actionable to demand enforcement for personal rights placed within penal decisions of foreign courts. Each person who benefits from enforcement of the foreign decision has the legal right to demand for enforcement of the foreign decision.
For the enforcement of foreign arbitration awards, the regulations that are going to be applied are ‘United Nations Charter about Enforcements of Foreign Arbitrations’ dated 1958 in other name New York Agreement and the Code of International Private and Civil Procedure Law (‘MOHUK’) numbered 5718 that mentioned above. Turkey is a party of the New York agreement.
In this article, the matter of which conditions are required for the enforcement of the foreign arbitration awards will be examined.
In order to have an enforcement decision about the enforcement of foreign arbitration award, there are some requirements.
First of all, one of the main conditions regarding to enforcement of foreign arbitration awards is the reciprocity principle to be realized. Reciprocity may be defined as, for a foreign person in any country to not have more legal rights than the rights that are given by that person’s own country to foreigners. It is doable to divide reciprocity to three as; political, legal and factual (de facto) reciprocity. Political reciprocity is provided by international agreements signed by countries, legal reciprocity is realized by providing some right to foreigner in domestic legal order and factual (de facto) reciprocity is realized by providing some right to foreigner in practice, in case of there is not any international agreement or a provision of law. MOHUK regulates that having enforcement about the decision given by authorized and incumbent court depends on if there is an agreement based on reciprocity principle between Turkish Republic and the country that the decision has been given or if there is a code or factual application which allows decisions by Turkish courts to be enforced.
Another one of the main conditions regarding to enforcement of foreign arbitrations is for a situation not to be exist which may cause the rejection of the enforcement request. The reasons that may cause the rejection of the enforcement request are listed under the Code of International Private and Civil Procedure Law (‘MOHUK’) article 62. According to mentioned article:
- The court rejects the request of enforcement if arbitration agreement is not signed or if there is not any arbitration clause within the main agreement. This situation is the requirement of the constitutional principle which says ‘No one may be judged without consent before any authorities other than belonging countries’. Arbitration agreement shall be evaluated separately from the main agreement. Arbitration agreement may not be valid, even so the main agreement is valid.
- The arbitration award must not be against to public morality or public order. The Court will investigate if the arbitration award is against to public morality or public order by itself.
- The request of execution of foreign arbitration award shall be rejected if it is not possible to resolve the conflict which is the subject of arbitration award according to Turkish Law. Arbitrage may take place only about the subjects that depend to both parties’ demands. In other words, conflicts which parties freely have the authority on may be resolved by arbitration. Parties have the right to make agreement of arbitration, if they may make an agreement freely to end the conflict and if this agreement is valid without a court decision.
- If one of the parties has not been represented before arbitrators and has not accepted the proceedings clearly after, the party which is demanded by the execution of the arbitration award has not been informed about the selection of arbitrator in accordance with the procedure or has been deprived of the right of defense, the request of execution of arbitration award will be rejected. However, for situations, it has to be proven by party whom defense right was violated.
- The enforcement of arbitration award will be rejected in case of arbitration agreement or arbitration clause is invalid according to the law determined by parties or if there is not such determination, to the law which was applied to arbitration award. However, these matters have to be proven by the defendant party.
- If the selection of arbitrator or the procedure that arbitrators applied are against the agreement of parties or to law that arbitration award has been subjected to in case of lack of agreement, the demand of enforcement of arbitration award will be rejected in case of these matter is proven by the defendant party.
- If the arbitration award includes a matter which is not neither in arbitration agreement nor in clauses or if the arbitration award exceeds the arbitration agreement or clause territory, the court will reject the enforcement request about this part of demand. However, it is also has to be proven by the defendant party.
- If the arbitration award was not finalized or became inexecutable or non-binding according to the law subjected to the arbitration award or to the law where the arbitration award has been made or to procedure subjected to arbitration award, or if the arbitration award was not cancelled by the entitled authority which is made by, the demand of enforcement will be rejected. However, it is also has to be proven by the defendant party.
In conclusion, the demand of enforcement of arbitration award can be enforceable if the principle of reciprocity accomplished and there is not any situation exist which may cause the rejection of the enforcement request.
