The scope of challenges raised in set-aside proceedings and the judicial approach to such challenges continue to be of particular importance in arbitration practice.
In two arbitration proceedings arising out of the same commercial relationship, which have recently become final following the completion of the set-aside and appeal process, the challenging party relied on various grounds for annulment, arguing, among other things, that the arbitral awards did not contain sufficient and reviewable reasoning, that the right to be heard had been violated due to the tribunal’s refusal to obtain expert evidence, that the tribunal had based its decision on legal grounds not debated by the parties, that the tribunal had violated the prohibition of surprise decisions by taking into account, as discretionary evidence, the award rendered in the first arbitration before it had become final, without informing the parties in advance that it would do so, that the arbitral proceedings should have been consolidated and that the outcome of the first arbitration should have been treated as a prejudicial issue in the second arbitration, that the tribunal had exceeded the scope of the arbitration agreement, that the awards were contrary to Turkish public policy, and that the tribunal had misapplied substantive law.
In addressing these allegations, the Regional Court of Appeal and the Court of Cassation reaffirmed that set-aside proceedings do not constitute an appeal on the merits, that arbitral awards are subject only to the limited grounds for annulment prescribed by law, and that an arbitral tribunal’s assessment of facts, evidence and legal issues is not subject to substantive judicial review (revision au fond). The courts further confirmed that objections not raised during the arbitration proceedings cannot subsequently be relied upon in set-aside or appeal proceedings, and that the public policy exception must be interpreted narrowly. Taken together, these decisions reinforce the settled approach that arbitral awards are subject only to limited judicial review and provide a recent illustration of the Turkish courts’ arbitration-friendly approach.
