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Annulment of the Arbitral Awards

There are limited number of grounds that a party may rely on to set aside an arbitral award. Annulment is the only remedy that a party has against an award in the courts of the place where the award was rendered while the enforcement may still be resisted in other jurisdictions. The consequence of a successful annulment of an arbitral award will be the prevention of enforcement of that award at the place of arbitration or elsewhere under the New York Convention.

For the arbitral awards, which were rendered within the scope the Turkish International Arbitration Law (the “TIAL”) the parties can take action only for the annulment of a ruling of the tribunal which means there is no appeal process for these arbitral awards. The relevant party must apply to the competent regional court for the annulment and the application for annulment automatically halts the enforcement of the arbitral awards rendered within the TIAL.

While there are similar provisions under the Turkish Code of Civil Procedure (the “TCCP”) for the annulment of domestic arbitral awards, the major difference under the TCCP is the application for annulment of a domestic arbitral award does not automatically suspend the enforcement of this award. However, the court may decide to suspend the enforcement of this award based on a security to be provided by the party applied for annulment.

Finally, it is noteworthy that, in terms of annulment of an ICSID award, the annulment process is subject to another internal process under ICSID Convention through an ad hoc annulment committee which is consisted of other three arbitrators to be appointed directly by the ICSID Secretariat, and it is not possible to set aside an ICSID award within the State Courts.

With its know-how and experience, Özcan Legal represents its clients in the annulment proceedings of foreign and domestic arbitral awards including the annulment proceedings before ICSID. Moreover, with its wide network with foreign law firms, Özcan Legal also assists its clients in their annulment proceedings outside Türkiye.

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