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The Court of Cassation Ruled That The Issuance of a Decision Without an Expert Report in Arbitration Proceedings Does Not Violate The Right To Be Heard

The 11th Civil Chamber of the Court of Cassation rejected a request to annul an arbitral decision rendered under the Arbitration Rules of the Istanbul Arbitration Center in a dispute arising out of the termination of a contract for the sale of electricity.

The party requesting annulment claimed that the arbitral tribunal did not conduct an expert examination and therefore restricted its right to be heard and its right to defense. The Istanbul Court of Appeals and the 11th Civil Chamber of the Court of Cassation concluded that, unlike the review of local court decisions by higher courts, the failure to conduct an expert examination in a proceeding conducted in accordance with the CCP and the Arbitration Rules does not constitute a violation of the right to be heard and the arbitral tribunal's decision without conducting an expert examination is not a ground for annulment. 

The party requesting annulment argued that the decision was erroneous in law and in its appreciation of the facts and should therefore be set aside. The Istanbul Court of Appeals and the Court of Cassation stated that in an annulment proceeding, it is not possible to examine whether the arbitral decision was appropriate or whether the law was correctly applied, and did not examine whether the decision was correct on the merits. The decision concludes that the examination of whether the arbitral decision is contrary to public policy does not permit the examination of the substantive correctness of the decision.

The grounds for annulment of arbitral awards are regulated in a numerus clausus in the second paragraph of Article 439 of the Code of Civil Procedure. In annulment suit, the examination is made in terms of the existence of these limited grounds. It is not clearly stated whether all the grounds for annulment listed in the Law are subject to the condition that they must be asserted and proved by the claimant or whether they will be taken into consideration ex officio by the court hearing the annulment action. This ambiguity in the Law has been resolved by the Court of Cassation. In the decision of the Court of Cassation, it is clearly stated that the contravention of public order and whether the dispute subject to the award is arbitrable under Turkish law are the grounds for annulment that should be considered ex officio by the court, and the other grounds for annulment should be asserted and proven by the party requesting annulment.

The Court of Cassation's decision is in line with the spirit of arbitration proceedings and the annulment procedure, and shows that the jurisprudence on arbitration in Turkey continues to develop in parallel with international practices.

Information Note:

According to Article 423 of the CCP, "The parties shall have equal rights and powers in arbitration proceedings. The parties shall be given the opportunity to exercise their right to be heard." Pursuant to Article 439(2)(F) of the CCP regulating the annulment of an arbitral award, failure to comply with the principle of equality of the parties and the right to be heard shall be grounds for annulment of the arbitral award.  Abide by the right to be heard is one of the requirements of the right to a fair trial under Article 6 of the ECHR and Article 36 of the Constitution and is considered as a fundamental human right. In a nutshell, the right to be heard is a right that ensures that the parties to the lawsuit are informed of the lawsuit against them, that they can assert their claims and defenses that affect the outcome of the lawsuit with equal opportunities, and that they can exercise their right of proof, and that the arbitrator must take these claims and defenses into account when making his/her decision.