Turkey: When National Courts And Arbitral Tribunals Collide: Assessing Jurisdiction Over Interim Measures In The Context Of Turkish International Arbitration Act

Introduction

Interim measures are a vital component of arbitration proceedings, aimed at providing protection to the parties involved in the dispute. In Turkey, the Turkish International Arbitration Act (TIAA) provides the legal framework for interim measures where the seat is Turkey and when there is a foreign element in the dispute. The interplay between national courts and arbitral tribunals regarding interim measures has been a subject of extensive debate. This article focuses on the jurisdictional limitations of arbitral tribunals in hearing objections to interim measures granted by Turkish courts, as illuminated by the recent Court of Cassation decision and an arbitral tribunal's decision.

The Turkish International Arbitration Act and Interim Measures

The Turkish International Arbitration Act (TIAA) regulates arbitration proceedings involving a foreign element. Article 6 of the TIAA sets out the limitations on arbitral tribunals' authority to grant interim measures and interim attachments, explicitly restricting them from granting measures that require enforcement through execution offices or that bind third parties.

The Court of Cassation Decision: Jurisdiction of Turkish Courts

Turkish courts have grappled with divergent rulings regarding the jurisdiction of arbitral tribunals to decide on interim measures granted by Turkish courts, creating a contentious issue in legal practice. The root of this controversy can be traced back to the provisions of the Turkish Code of Civil Procedure (TCCP), which prescribe that objections to interim measures should be heard by the court having jurisdiction for adjudicating the underlying case.

In light of this statutory provision, several Turkish courts have undertaken an in-depth analysis of the TCCP and reached the conclusion that arbitral tribunals possess the authority to address objections raised against interim measure decisions. As a result, there has been a considerable divergence in approaches across Turkish courts regarding the appropriate venue for raising objections to interim measures granted by Turkish courts.

In October 2022, the Court of Cassation issued a unanimous decision on the issue of interim measures granted by Turkish courts in arbitration proceedings. The Court of Cassation decision clarified that Turkish courts have jurisdiction to examine objections raised against interim legal protection measures (interim injunctions) granted by Turkish courts in disputes with a foreign element subject to arbitration. This decision establishes that the presence of an arbitration agreement does not preclude parties from seeking interim measures from Turkish courts or from raising objections to those measures before Turkish courts.

The Arbitral Tribunal's Decision: Lack of Jurisdiction to Hear Objections to Interim Measures Granted by Turkish Courts

In a recent case, an arbitral tribunal with a venue in Turkey evaluated its jurisdiction to decide on objections to interim measures granted by a Turkish court. In line with the Court of Cassation decision, the arbitral tribunal's decision emphasized its lack of jurisdiction to hear objections to interim measures granted by Turkish courts. This lack of jurisdiction is based on the restrictions set forth in Article 6 of the TIAA, which prohibits arbitral tribunals from issuing interim measures or attachments that need enforcement through execution offices or that bind third parties.

Additionally, the tribunal recognized the Court of Cassation's decision, which established a new legal situation where Turkish courts now have the jurisdiction to evaluate objections to interim measures granted by them. This recognition underscores the tribunal's acknowledgment of its lack of jurisdiction to hear objections to interim measures granted by national courts.

Furthermore, the tribunal ruled that the TCCP could not be taken into account in the case at hand since the provisions of the TIAA supersede those of the TCCP. Consequently, the tribunal concluded that it had no jurisdiction to decide on the referred matter.

Conclusion

The Court of Cassation decision and the arbitral tribunal's decision significantly contribute to the understanding of the jurisdictional limitations of arbitral tribunals in hearing objections to interim measures granted by Turkish courts. These decisions reinforce the restrictive approach of the TIAA, emphasizing the lack of jurisdiction of arbitral tribunals to hear objections to interim measures that require enforcement through execution offices or bind third parties.

As a result, parties to disputes with a foreign element subject to arbitration can seek interim measures from Turkish courts, and any objections to these measures should be raised before the national courts, not the arbitral tribunals. This approach maintains the balance between the jurisdiction of national courts and arbitral tribunals and safeguards parties' rights in international disputes.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.