TURKISH INTERNATIONAL ARBITRATION LAW (TIAL)

UNCITRAL[1]

LONDON COURT OF INTERNATIONAL ARBITRATION (LCIA)

WEB ADRES

http://www.mevzuat.gov.tr/MevzuatMetin/1.5.4686.pdf

www.uncitral.org

www.lcia-arbitration.com

EFFECTIVE DATE

Turkish International Arbitration Law (TIAL) No. 4686, gazetted in Official Journal No. 24453 and dated 5/07/2001 and entered into force.

Adopted in 1976 by the General Assembly of the United Nations and recommended for inclusion in international commercial contracts. The rules are intended to provide a comprehensive and universal set of procedural rules which parties may select for the conduct of ad hoc arbitrations. The Rules were last revised in 2010. The Rules for Arbitration of the Kuala Lumpur Regional Centre for Arbitration, comprising two parts, the Specific Arbitration Rules and the UNCITRAL Arbitration Rules.

Effective from 1 January 1998.

INSTITUTIONAL

INVOLVEMENT

No. The Rules were introduced to be followed in ad-hoc arbitrations.

No. The Rules were introduced to be followed in ad-hoc arbitrations.

No. The Rules were introduced to be followed in ad-hoc arbitrations.

COMMENCEMENT OF

ARBITRATION

“Unless otherwise agreed by the parties, an arbitration commences on the date on which a request for the appointment of arbitrators is made to the civil court of first instance or to a person or institution which, according to the parties' agreement…” (Art. 10/A).

Arbitral Proceedings deemed to have commenced on the date the Respondent receives a written Notice of Arbitration from the Claimant (Art. 3/2).

The date of receipt by the registrar of the Request for Arbitration  shall be treated as the date  on which the arbitration  has commenced (Art. 1/2).

THE NOTICE OF

ARBITRATION

“… a request for the appointment of arbitrators …” (Art. 10/A).

The Notice of Arbitration should include a brief description of the claim, indication of amount involved and a proposal as to the number of arbitrators. The Claimant may treat Notice of Arbitration as the Statement of Claim (Art. 3/3).

A Request for Arbitration should include a brief statement describing the nature and circumstances of the dispute and specifying the claims advanced by the Claimant and proposal as to the number of arbitrators (Art. 1/1).

RESPONSE TO

THE NOTICE OF

ARBITRATION/REQUEST FOR

ARBITRATION

If the respondent fails to communicate his statement of defence, the arbitral tribunal shall continue the proceedings without treating such failure, in itself, as an admission of the claimant's allegations (Art. 11/C-3).

Within 30 days of receipt of the Notice of Arbitration, the Respondent shall submit a Response to the Notice of Arbitration (Art. 4/1).

Within 30 days of receiving the Request for Arbitration the Respondent shall send a written response to the Registrar (Art. 2).

STATEMENT OF CLAIM/STATEMENT OF CASE

Within the period of time agreed by the parties or determined by the arbitral tribunal, the claimant shall submit to the arbitral tribunal its statement of claim containing the parties' names, titles, addresses and its representatives, the arbitration agreement, the underlying contract or legal relationship, the circumstances upon which the claim is based, the subject matter of the dispute, the amount in dispute and its request (Art. 10/D).

Statement of Claim to include a statement of facts supporting the claim, the points of issue, and the relief and remedy sought.

The Claimant may treat Notice of Arbitration as the Statement of Claim. If not, the Claimant must send to the Respondent and the Arbitrators the Statement of Claim within a period of time set by the Tribunal (Art. 20/1).

The periods of time fixed by the Arbitral Tribunal for the communication of written statements (including the Statement of Claim and Statement of Defence) should not exceed 45 days (Art. 25).

Within 30 days of receipt of the written notification from the Registrar of the formation of the Arbitral Tribunal the Claimant shall submit a Statement of Case (Art. 15/3).

STATEMENT OF

DEFENCE

The respondent too shall submit within the same period to the arbitral tribunal its statement of defence. The parties may submit with their statements all documents they consider to be relevant and may add a reference to the documents or other evidence they will submit (Art. 10/D).

The Respondent may treat the Notice of Response as the Statement of Defence. If not, the Respondent must send to the Claimant and arbitrators the statement of defence within a period of time set by the Tribunal (Art. 21/1).

The periods of time fixed by the Arbitral Tribunal for the communication of written statements (including the Statement of Claim and Statement of Defence) should not exceed 45 days (Art. 25).

During the course of the Arbitral proceedings, a party may amend or supplement its claim or defence, including a counterclaim unless the Arbitral Tribunal considers it inappropriate with regards to delay or prejudice (Art. 22).

Within 30 days of receipt of the Statement of Case the Respondent shall send to the Registrar a Statement of Defence. Any counter claims should be submitted with the Statement of Defence (Art. 15/4).

NUMBER OF

ARBITRATORS

The parties are free to determine the number of arbitrators. However, the number shall be odd (Art. 7/A).

Only real persons can be appointed as arbitrators (Art. 7/B-1).

If by no later that 30 days following receipt of the Notice of Arbitration by the Respondent the parties have not agreed on the appointment of one arbitrator, three arbitrators shall be appointed (Art. 7).

A sole arbitrator shall be appointed unless the parties have agreed in writing otherwise, or the LCIA Court determines that in view of all of the circumstances of the case a three-member Tribunal is appropriate (Art. 5/4).

APPOINTMENT OF

ARBITRATORS

Unless otherwise agreed by the parties, the following principles shall be applicable to the appointment of the arbitrators:

2. In an arbitration with a sole arbitrator, if the parties are unable to agree on the arbitrator, he shall be appointed, upon request of a party, by the civil court of first instance.

3. In an arbitration with three arbitrators, each party shall appoint one arbitrator and the two arbitrators thus appointed shall appoint the third arbitrator. If a party fails to appoint the arbitrator within thirty days of receipt of a request to do so from the other party, or if the two arbitrators fail to agree on the third arbitrator within thirty days of their appointment, the appointment shall be made, upon request of a party, by the civil court of first instance. The third arbitrator appointed shall be the chairman of the arbitral tribunal.

4. In an arbitration with more than three arbitrators, the arbitrators who will appoint the last arbitrator shall be appointed by the parties in equal numbers in accordance with the procedure set forth in the above paragraph.

Where under an appointment procedure agreed upon by the parties

1. a party fails to act as required under such procedure;
2. the parties, or two arbitrators, are unable to reach an agreement expected of them under such procedure; [or]

3. a third party, including an institution, that is empowered to appoint arbitrators fails to perform any function entrusted to it under such procedure,

the appointment of the arbitral tribunal shall be made, upon a party request, by the civil court of first instance (Art. 7/B-2, 3, 4).

If the parties have agreed to appoint a sole arbitrator and if within 30 days after receipt by all parties of a proposal for the appointment of a sole arbitrator the parties have not reached agreement, at the request of a party the sole arbitrator will be appointed by the appointing authority (See Art. 6 for the Designating and Appointing Authorities) (Art. 8/1).

If three arbitrators are to be appointed, each party shall appoint one arbitrator. The two appointed arbitrators appoint the third arbitrator (Art. 9/1).

If within 30 days after receipt of a party’s notification of the appointment of an arbitrator, the other party has not notified the first party of the arbitrator it has appointed, the first party may request the appointing authority to appoint the second arbitrator (Art. 9/2).

If within 30 days after the appointment of the second arbitrator, the two arbitrators have not agreed on the choice of the presiding arbitrator, the presiding arbitrator shall be appointed by the appointing authority (See Art. 8) (Art. 9/3).

The LCIA Court alone is empowered to appoint arbitrators (Art. 5/5).

MULTI-PARTY

DISPUTES

There is not any specific provision. The issue is subject to the general rules.

Where three arbitrators are to be appointed and there are multiple parties as Claimant or Respondent, unless the parties have agreed to another method of appointment or arbitrators, the multiple parties shall jointly appoint the arbitrator (Art. 10/1).

The Arbitral Tribunal may upon the application of a party, allow one or more third parties to be joined in the arbitration as a party provided any such third party and the applicant party have consented thereto in writing (Art. 22/1.h).

PLACE OF ARBITRATION

The parties or an arbitration institution chosen by the parties are free to determine the place of arbitration. Failing such agreement or determination, the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case. The arbitral tribunal may meet upon notification in advance to the parties at any place where the circumstances of the arbitration so require (Art. 9).

Unless the parties have agreed upon the place where the arbitration is to be held, the place of arbitration shall be determined by the Arbitral Tribunal  (Art. 18/1).

The parties may agree in writing the seat (or legal place) of the arbitration. If the parties fail to agree the seat of arbitration, the seat of the arbitration shall be London (Art. 16).

LANGUAGE OF THE

ARBITRATION

The language of the arbitration shall be Turkish or any other language, which is the formal language of a state that is recognized by the Republic of Turkey. The parties are free to agree on the language or languages to be used in the arbitral proceedings. Failing such agreement, the arbitral tribunal shall determine the language or languages. The agreement or determination, unless otherwise specified therein, shall apply to any written statement by a party, any hearing and any award, decision or other communication by the arbitral tribunal.

The arbitral tribunal may order that any documentary evidence shall be accompanied by a translation into the language or languages used in the arbitration proceedings (Art. 10/C).

Subject to agreement by the parties the Tribunal shall determine the language of the arbitration (Art. 19/1).

The language of the Arbitration shall be the language of the Arbitration Agreement.

Art. 17.3: Unless the parties have agreed upon the language or languages of the arbitration, the Arbitration Tribunal shall decide upon the language of the arbitration (Art. 17/1).

LAW TO BE APPLIED

BY THE ARBITRAL

TRIBUNAL TO

THE MERITS AND

SUBSTANCE OF THE

DISPUTE

The arbitral tribunal shall decide the dispute in accordance with such rules of law as are chosen by the parties as applicable to the substance of the dispute. The applicable trade usages under the law shall be taken into account in construing the provisions of the underlying contract and for filling gaps. Any designation of the law or legal system of a given State shall be construed, unless otherwise expressed, as directly referring to the substantive law of that State and not to its conflict of laws rules or its rules of procedure. Failing any designation by the parties of the applicable substantive law, the arbitral tribunal shall apply the substantive law of a State, which has the closest connection with the dispute. The arbitral tribunal shall decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorized it to do so (Art. 12/C).

The Arbitral Tribunal shall apply the rules of law chosen by the parties, failing such agreement the Tribunal shall apply the law which it determines to be appropriate (Art. 35/1).

The law applicable to the arbitration (if any) shall be the arbitration law of the seat of the arbitration, unless the parties have agreed in writing on the application of another arbitration law and such agreement is not prohibited by the law of the Arbitral seat (Art. 16/3).

The Arbitral Tribunal shall decide the parties dispute based upon the law chosen by the parties. Where the parties have not agreed the law to be applied to the dispute, the Arbitral Tribunal shall apply what rules of law it considers appropriate (Art. 22/3).

TERMS OF REFERENCE

& PROCEDURAL

TIMETABLE

Unless otherwise agreed by the parties, the arbitral tribunal, following the submissions as to the claim and defence shall draw up its terms of reference.

The terms of reference may contain such particulars as the parties' names and titles, their addresses for notification during the arbitration, a summary of their claims or defences, their requests, explanations on the dispute in question, the names, surnames, titles, and addresses of the arbitrators, the place of arbitration, the term of arbitration, the commencement of the term, explanations as to the procedural law or rules applicable to the dispute, and whether or not the arbitrators are competent to act as amiable compositeur.

The terms of reference shall be signed by the arbitral tribunal and the parties (Art. 10/E).

Not applicable under UNCITRAL Arbitration Rules.

Not applicable for LCIA Arbitrations.

ESTABLISHING THE

FACTS OF THE CASE /

THE EVIDENCE

The parties shall provide their evidence within the term that is determined by the arbitrators. The arbitral tribunal may request from the competent court of first instance assistance in taking evidence. In such case, the provisions of the Code of Civil Procedure shall be applicable (Art. 12/B).

Each party has the burden of proving the facts relied upon in support of its claim or defence (Art. 27/1).

The Arbitral Tribunal may require the parties to produce documents and other evidence within such a period of time as the Tribunal determines (Art. 27/3).

The Arbitral Tribunal shall determine the admissibility, relevance, materiality and weight of the evidence offered (Art. 27/4).

If a party, after invited by the Arbitral Tribunal to produce documents, exhibits or other evidence, fails to do so within the established period of time, without showing sufficient cause, the Arbitral Tribunal shall make the award on the evidence before it (Art. 30/3).

Any party has a right to be heard orally before the Arbitral Tribunal unless the parties have agreed in writing to a documents-only arbitration (Art. 19/1).

DOCUMENTARY

EVIDENCE

The arbitral tribunal shall decide whether to hold oral hearings for presentation of evidence or for oral argument, or whether the proceedings shall be conducted on the basis of the case file. However, unless the parties have agreed that no hearings shall be held, the arbitral tribunal shall hold hearings at an appropriate stage of proceedings, if so requested by a party (Art. 11/A).

The Arbitral Tribunal may require the parties to produce documents and other evidence within such a period of time as the Tribunal determines  (Art. 27/3).

The Arbitral Tribunal shall determine the admissibility, relevance, materiality and weight of the evidence offered (Art. 27/3).

If a party, after invited by the Arbitral Tribunal to produce documents, exhibits or other evidence, fails to do so within the established period of time, without showing sufficient cause, the Arbitral Tribunal shall make the award on the evidence before it (Art. 30/3).

The parties may agree in writing to have a documents-only arbitration. Any party has the right to be heard orally before the Arbitral Tribunal.

Art. 15.6: Both the Statement of Case and Response shall be accompanied by copies of all essential documents upon which the party relies, unless they are too voluminous, at which point they should be submitted by list (Art. 19/1).

ORAL HEARINGS DEFAULT & NON

ATTENDANCE

The arbitral tribunal shall give sufficient advance notice to the parties concerning the date of any site-inspection, examination by an expert, or of any hearing and any meeting of the arbitral tribunal for the purposes of examining other evidence, and of the consequences of the failure to attend any inspection, examination, hearing or meeting (Art. 11/A-Para. 2).

In the event of an oral hearing, the Arbitral Tribunal shall give the parties adequate advance notice of the date, time and place of the hearing (Art. 28/1).

Hearings will be held in private unless the parties agree otherwise (Art.28/3).

Any party that expresses a desire has the right to be heard orally before the Arbitral Tribunal (Art. 19/1).

DEFAULT & NON

ATTENDANCE

If any party fails to appear at a hearing or to produce evidence, the arbitral tribunal may continue the proceedings and may make the award on the evidence before it (Art. 11/C-4).

If within a period of time fixed by the UNCITRAL Rules or the Arbitral Tribunal:

(1): The Claimant has failed to communicate its Statement of Claim, the Arbitral Tribunal shall issue and order terminating the Arbitral proceedings, unless there are other remaining matters, such as a counter claim (Art. 30).

(2): The Respondent has failed to communicate its response to the Notice of Arbitration or its Statement of Defence, the Arbitral Tribunal shall order the proceedings to continue, without treating such failure as an admission of the Claimant’s allegations.

If a party, duly notified under the Rules, fails to appear at a hearing, without showing sufficient cause for such failure, the Arbitral Tribunal may proceed with the arbitration (Art. 30/2).

If a party, duly invited by the Arbitral Tribunal to produce documents, exhibits or other evidence, fails to do so within the established period of time, without showing sufficient cause for such failure, the Arbitral Tribunal may make an award on the evidence before it (Art. 30/3).

If the Respondent fails to submit a Statement of Defence or the Claimant a Statement of Defence to Counterclaim, or if at any point any party fails to avail itself of the opportunity to present its case as directed by the LCIA Rules or Arbitral Tribunal, the Arbitral Tribunal may nevertheless proceed with the arbitration and make an award (Art. 15/8).

INTERIM MEASURES

It is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection or an interim attachment and for a court to grant such measure or attachment.

Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order an interim measure of protection or an interim attachment during arbitral proceedings. The arbitral tribunal may require any party to provide appropriate security in connection with such measure or attachment. The arbitral tribunal shall not grant interim measures or interim attachments [a] that are required to be enforced through execution offices or to be executed through other official authorities or [b] that bind third parties.

If a party does not comply with the interim measure or attachment, the other party may request the assistance of the competent court for taking an interim measure of protection or an interim attachment. The competent court, if necessary, may hear [the case in question] through a substitute court.

The parties' right to make a request [for interim measures of protection or interim attachments to a court] in accordance with the Code of Civil Procedure and the Code of Execution is reserved.

Any decision of a court, with respect to interim measures of protection or interim attachments, that is given upon a request of a party prior to commencement of arbitration or during arbitral proceedings, shall automatically cease to have effect where the decision of the arbitral tribunal becomes enforceable or where the arbitral tribunal denies [to hear] the case in its decision (Art. 6).

At the request of either party the Tribunal may grant interim measures, including the reservation of assets and maintaining the status quo pending the determination of the dispute (Art. 26/1).

The Tribunal shall have the power, unless otherwise agreed by the parties to order a party to a claim or counterclaim to provide security for all or part of the amount in dispute, order the preservation, storage or disposal of any property under the control of the parties and relating to the subject matter of the arbitration and on a provisional basis, subject to the final determination in an award Grant any relief the Arbitral Tribunal would have the power to grant in an award (Art. 25).

SECURITY OF COSTS

The arbitral tribunal may request that the claimant deposit an advance for the arbitration costs.

If the advance is not paid within the period determined in an arbitral decision, the arbitral tribunal may suspend the proceedings  (Art. 16/C).

At the request of either party the Tribunal can grant interim measures including the preservation of assets (Art. 26/1).

The Arbitral Tribunal has the power, upon the application of a party, to order any claiming  or counterclaiming party to provide security for the legal costs or other costs of any other party by way of deposit, bank guarantee or in any other manner the Arbitral Tribunal considers appropriate (Art. 25/2).

CONFIDENTIALITY

There is not any specific provision. The issue is subject to the general rules.

The award may be made public with the consent of both parties (Art. 34/5).

Unless the parties agree in writing to the contrary, the parties Undertake to keep confidential all matters regarding the arbitration (Art. 30/1).

The LCIA Court does not publish any award or any part of the award without the prior written consent of the parties (Art. 3/3).

TIMING OF THE

AWARD

Unless otherwise agreed by the parties, an award shall be rendered within one year, in the case of a sole arbitrator, from the date of his appointment or, in the case where there is an arbitral tribunal, from the date when the minutes of the tribunal's first meeting are kept.

The term of arbitration may be extended, upon agreement of the parties, or, in case of failure, upon a party request, by the civil court of first instance Upon denial of the request, arbitration shall come to an end at the date of the expiry of the term of arbitration.

The court's decision shall be final   (Art. 10/B).

No prescribed time limit for delivering the award.

No prescribed time limit for delivering of the award.

DECISION OF THE

ARBITRATORS

Any decision of the arbitral tribunal shall be made, unless otherwise agreed by the parties, by a majority of all its members   (Art. 13/A).

Where there is more than one arbitrator, the decision of the Arbitral Tribunal shall be made by the majority of the arbitrators (Art. 33/1).

Where there are three arbitrators and the Arbitral Tribunal fails to agree on any issue, the arbitrators shall decide that issue by majority. Failing a majority decision on any issue, the Chairman of the Arbitral Tribunal shall decide that issue (Art. 26/3).

COMMUNICATION OF

THE AWARD

The arbitral award shall be notified to the parties by the sole arbitrator or the chairman of the arbitral tribunal   (Art. 14/A-5 Para. 2).

Unless otherwise agreed by the parties, any written communication is deemed to have been received if it is delivered to the addressee personally or if it is delivered at his domicile, habitual residence, place of business or mailing address   (Art. 14/C).

Copies of the award signed by the arbitrators shall be communicated to the parties by the Arbitral Tribunal (Art. 34/6).

The sole arbitrator or chairman shall be responsible for delivering the award to the LCIA, which in turn will transmit certified copies to the parties provided that the costs of the arbitration have been paid to the LCIA (Art. 26/5).

REMEDYING OF

OMISSIONS

Within thirty days of receipt of the award, a party, with notice to the other party, may request the arbitral tribunal:

1. to correct in the award any material errors in computation, any clerical or typographical errors or any errors of similar nature;

2. to give an interpretation of a specific point or part or whole of the award.

If the arbitral tribunal considers that, following the receipt of the other party's opinion, the request is justified, it shall make the correction of the material error or give the interpretation within thirty days of receipt of the request.

The arbitral tribunal may correct any material error on its own initiative within thirty days from the date of the award.

A party, with notice to the other party, may request, within thirty days of receipt of the award, the arbitral tribunal to make an additional award as to the claims presented in the arbitral proceedings but omitted from the award. If the arbitral tribunal considers the request to be justified, it shall make the additional award within sixty days.

The decision concerning the correction, interpretation and the additional award is notified to the parties and shall form part of the award  (Art. 14/B).

Within 30 days of receipt of the award, either party, with notice to the other party may request the Arbitral Tribunal to correct in the award any errors in computation and any clerical or typographical errors (Art. 38/1).

If the Arbitral Tribunal consider the corrections are justified it must make the corrections within 45 days of receipt of the request (Art. 38/2).

Art. 39(1): Within 30 days after receipt of the award, either party, with notice to the other party, may request the Arbitral Tribunal make an additional award as to claims presented in the Arbitral proceedings but omitted from the award (Art. 39/1).

If the Arbitral Tribunal considers the request justified, it shall make the additional award within 60 days of receipt of the request (Art. 39/2).

Within 30 days of receipt of the award (or lesser period agreed by the parties) a party may by written notice to the Registrar and copied to all parties request the Arbitral Tribunal correct in the award any errors in computation, clerical or typographical errors or any errors of a similar nature (Art. 27/1).

APPEAL

Recourse to a court against an arbitral award may be made only by an application for setting aside the award. Such recourse shall be made before the civil court of first instance. The application for recourse shall be given priority and shall be handled expeditiously (Art. 15/A).

All awards shall be made in writing and shall be final and binding on all parties (Art. 34/2).

All awards shall be final and binding on the parties. By agreeing to arbitration under the LCIA Rules the parties irrevocably waive their right to any form of appeal, review or recourse to any state court or other judicial authority (Art. 26/9).

COSTS

Unless otherwise agreed by the parties, the fees of the arbitrators shall be fixed between the arbitral tribunal and the parties, by taking into consideration the amount in dispute, the nature of the dispute and the term of arbitral proceedings  (Art. 16/A).

The Arbitral Tribunal shall fix the costs of the arbitration in the final award (Art. 40).

The costs of the arbitration shall in principle be borne by the unsuccessful party. However, the Arbitral Tribunal may award apportion costs as it considers reasonable taking into account the circumstances of the case (Art. 42).

On its establishment the Arbitral Tribunal may request the parties deposit an equal amount as an advance on costs (Art. 43/1).

The costs of the Arbitration (other than the legal or other costs incurred by the parties) shall be determined by the LCIA in accordance with Schedule of Costs set by the LCIA. The parties are jointly and severally liable to the Arbitral Tribunal and the LCIA for the Arbitration costs (Art. 28/1).

The Arbitral Tribunal shall have the power to order in its award al or part of the legal costs incurred by a party to be paid by another party (Art. 28/3).

ARBITRATORS’ FEES/INSTITUTION’S COSTS

The parties may determine those fees by making a reference to the established international rules or institutional arbitration rules  (Art. 16/A Para. 2).

The fees of the Arbitral Tribunal shall be reasonable in amount, taking into account the amount in dispute (Art. 41/1).

The costs of the Arbitration (other than the legal or other costs incurred by the parties) shall be determined by the LCIA in accordance with Schedule of Costs set by the LCIA. The parties are jointly and severally liable to the Arbitral Tribunal and the LCIA for the Arbitration costs (Art. 28/1).

EXPEDITED

PROCEDURE

No

No

Yes