Akıncı Arbitration Newsletter - May 2023

Law Commission of England and Wales and the Ministry of Justice of Germany Continue Their Work on Amending Arbitration Laws

In its Consultation Paper on the review of the Arbitration Act 1996 dated March 2023, the Law Commission of England and Wales focused on three proposals. Firstly, it proposed that the law of the seat of the arbitration should be the law of the arbitration agreement unless the parties agree otherwise in the arbitration agreement itself. Secondly, it proposed to emphasise in statute that in an application for annulment of an arbitral award for lack of jurisdiction, the court will not conduct a “rehearing” of the dispute or of evidence, and will not consider new evidence or arguments. Finally, it was suggested to add a provision in statute that it is always appropriate for the parties to request that the arbitrator have separate nationality to the parties, while it also discussed how to avoid discrimination in the appointment of arbitration.

The Ministry of Justice of Germany has also announced that they have commenced working on the revision of the German Arbitration Law. This revision will amend the Arbitration Law, which entered into force 26 years ago, for the first time. The proposed amendments include (1) provisions for oral and electronic execution of arbitration agreements, (2) the appointment of arbitrators in multi-party arbitrations, (3) online hearings, (4) the publication of arbitral awards; and (5) that, in setting-aside and enforcement proceedings, documents may be submitted in English without translation and, if the parties agree, conduct such proceedings before state courts entirely in English.

The Court of Cassation Ruled that Objections Regarding the Arbitrators' Failure to Comply with the Obligation of Impartiality and Independence should be Raised in the Arbitration Proceedings

The claimant requested the annulment of the arbitral award on the basis that the arbitrators were not impartial and independent, and stated that two members of the arbitral tribunal had previously been partners in the same law firm.

The claimant also argued that the application in the final award of the Code of International Arbitration (“Milletlerarası Tahkim Kanunu”), contrary to the parties' agreement to apply the rules of the Code of Civil Procedure (“Hukuk Muhakemeleri Kanunu”, “CCP”), was procedurally irregular. Finally, the Claimant challenged the arbitral tribunal's assessment of the merits.

The Court of Appeal, on the other hand, held that the fact that two of the arbitrators formerly operated the same law firm did not contravene the principle of impartiality, that the arbitrators were not required to disclose this fact, and that it had to be raised during the arbitration proceedings in order to be raised in the annulment proceedings. In terms of the procedural rules, the Court stated that the tribunal’s application of the Code of International Arbitration was correct considering the circumstances of the case, and that this issue cannot be considered as a ground for annulment since the provisions of the CCP and the Code of International Arbitration do not differ in terms of the procedures performed in the proceedings. Finally, the Court of Appeal held that objections to the merits of the award cannot be taken into account in the annulment proceedings. Thus, the Court rejected the request for annulment.

On appeal, the 11th Civil Chamber of the Court of Cassation upheld the decision of the Court of Appeal dated 10 October 2022 and numbered E. 2022/5447 K. 2022/6806.

What Happened in Turkish Arbitration in April 2023?

Prof. Ziya Akıncı made a presentation titled "Construction Contracts and Investment Arbitration" at the Investment Arbitration Webinar organised in cooperation with ISTAC and the Arbitration Centre of the Kyrgyz Chamber of Commerce and Industry. Prof. Akıncı also delivered a speech on "Advantages of ISTAC and the Resolution of Russian Disputes Resolved before ISTAC" at the seminar on "Resolution of Disputes involving Russian Parties outside Russia" organised by Moscow State University.

Tagged with: Akıncı Law Office, Ziya Akıncı, Beril Kasap, Dispute Resolution, Arbitration