Akıncı Arbitration Newsletter - September 2023

European Commission formally proposed ECT withdrawal

Last year, after eight European Union ("EU") countries announced their intention to withdraw from the Energy Charter Treaty ("ECT"), the EU Parliament urged EU Member States to withdraw from the ECT in a coordinated manner. When efforts to modernise the ECT proved unsuccessful, the European Commission formally called on the EU, Member States and Euratom to withdraw from the ECT. In its call, the Commission emphasised the critical issue of climate change and stated that the ECT has remained largely unchanged since its adoption, rendering it no longer compatible with the European Green Deal, the Paris Agreement and the EU's climate goals. The Commission's proposal needs to be adopted by a vote to approve withdrawal from the Treaty.

The Court of Cassation Decided that the Objections Regarding the Procedure of Arbitration Proceedings Must be Raised Timely and the Arbitral Award cannot be Reviewed on the Merits

With its decision dated 28 March 2023 and numbered 2023/989 E. and 2023/1241 K, the 6. Civil Chamber of the Court of Cassation overturned the Regional Court of Appeal’s decision which granted the setting aside motion against an arbitral award.

The Regional Court of Appeal accepted the setting aside application, concluding that (a) the composition of the tribunal that was appointed pursuant to the arbitration agreement is contrary to impartiality and equality, (b) the expert who was instructed by the tribunal to prepare an expert report had a conflict of interest with one of the members of the tribunal and (c) that the award was contrary to public policy.

The Court of Cassation overturned the decision of the Regional Court of Appeal, pointing out that the parties mutually agreed on the procedure for the selection of the arbitrators by agreement and that this agreement cannot be a ground for setting aside the award. Furthermore, the Court of Cassation held that the objection regarding the conflict of interest between one of the members of the tribunal and the expert shall not be taken into consideration since it was not raised during the arbitration proceedings in accordance with Article 409 of the Turkish Civil Code of Procedure (“CCP”).

Finally, the Court of Cassation reaffirmed its legal precedent which maintains that the arbitral tribunal has the discretion whether to resort to expert evidence, that the determination and analysis of the applicable law belong to the arbitral tribunal and that the award cannot be reviewed on its merits.

What Happened in Turkish Arbitration in August 2023?

Gary Born, a world-renowned arbitration expert, was appointed to the ISTAC Court of International Arbitration.