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INTRODUCTION TO TOBB ARBITRATION

By Kyle Ferguson,2014-10-17 13:46
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INTRODUCTION TO TOBB ARBITRATION

    GENARAL INFORMATION ABOUT ARBITRATION

    There have been structural changes within the business world as a result of the rapid developments within the Turkish economy, and the internal and foreign markets along with transition to the Free Market Economy. As a result of this, concentration and volume of domestic and foreign trade have increased, and in parallel with this increase legal disputes have also accreted rapidly. Therefore, resolution of these accreted disputes within a short period of time has become a necessity for the enterprise and business world. Our Union, the highest level representative of the private enterprise community in Turkey, has been closely following the developments and needs, and has established the TOBB Arbitration Council. We believe that the TOBB Arbitration Council will remove an important deficiency in the rapid settlement of the disputes in the business world and it will be possible to rapidly settle the disputes that may arise among the Turkish companies, between the Turkish companies and foreign companies, and among the foreign companies. Arbitration is the settlement of the disputes between the parties with the decision of the arbitrator(s) appointed by the parties and/or their authorised representatives and competent authorities on issues for which arbitration is not prohibited by law, pursuant to an “Arbitration Agreement” or “Arbitration Clause” without applying to the state judiciary.

    Arbitration, especially within the international arena, has gradually become a widespread institution due to the fact that the disputes can be settled within a short period of time by the arbitrator(s) who are the experts of the subject matters and that the Arbitral Awards are of the same effects as of the court judgements.

    If the Businessmen and industrialists want their commercial or industrial disputes, domestic and international, to be settled by arbitration, they can do this by including an arbitration clause within their main contracts as “IN THE EVENT OF ANY DISPUTE ARISING OUT OF THİS CONTRACT SHALL BE SETTLED THROUGH ARBITRATION IN ACCORDANCE

    WITH THE TOBB ARBITRATION RULES.” The parties can also make a separate arbitration agreement, stating the information about the nomination and the number of the arbitrators, and application to the Chairmanship of the TOBB Arbitration Council if the disputes arise.

    INTRODUCTION TO TOBB ARBITRATION

The TOBB has prepared and implemented the Arbitration Rules- for the rapid settlement of

    the disputes that may arise out of the commercial and industrial transactions among the Turkish businessmen or between them and their foreign counterparts or among the foreign businessmen.

    Furthermore, an Arbitration Council has been formed within the TOBB for the implementation of the Arbitration procedure.

    We must emphasize the fact that the commercial and industrial disputes are settled through arbitration and especially by independent arbitration organizations worldwide.

    The reason for this is that arbitration is faster and more reliable for the protection of commercial secrets compared to litigation.

    Furthermore, the Arbitral Awards are enforceable as if they are judgments of courts provided that the procedural conditions are complied with.

    Likewise, the Arbitral Awards may be appealed, similar the court judgments.

    The TOBB Arbitration Council itself does not settle the disputes, but ensures the independent and competent arbitral tribunals settle the commercial and industrial disputes rapidly, trustfully and justly in accordance with the TOBB Arbitration Rules.

    However, in order to benefit from this arbitration process, it is necessary and sufficient for the businessmen and industrialists to include the following clause within their agreements “IN THE EVENT OF ANY DISPUTE ARISING OUT OF THİS CONTRACT SHALL BE

    SETTLED THROUGH ARBITRATION IN ACCORDANCE WITH THE TOBB ARBITRATION

    RULES.”

    Additionally, it is helpful to state whether the disputes shall be settled by a sole arbitrator or three arbitrators, the place, language of the arbitration and the applicable law to the dispute.

    The parties are assumed to have accepted the TOBB Arbitration Rules, if they agree to apply to the TOBB Arbitration.

    Arbitration shall still be performed if one of the parties rejects arbitration despite the arbitration clause.

The following procedures are required as a requisite of the Rules:

    A party, who wishes to apply to the TOBB Arbitration, submits its request to the Chairmanship of the TOBB Arbitration Council (Secretariat, the Legal Advisor’s Office), including the company names, citizenships, titles and addresses of the parties in dispute, adding their claims with evidence, and the information and the evidence about the appointment and the number of arbitrators. Arbitration fees determined by the Council must be paid in advance in order to process the application.

    In principle, the payments of the fees are made equally by the parties. However, if one of the parties does not pay its share, then the other party must pay the total amount of the fees.

    Division of the expenses between the parties shall be determined within the Arbitral Awards.

    The case shall not be considered as filed and no hearings shall start until the expenses are paid in advance.

    The disputes are settled by a sole arbitrator or three arbitrators. If the parties agree to settle the disputes by a sole arbitrator, then they nominate the arbitrator together and present their nomination to the Council for approval.

    If one of the parties does not nominate its arbitrator in due time, the Council appoints that arbitrator instead.

    If the parties envisage that their nominated arbitrators shall nominate the third arbitrator within a specified period, then it is necessary for the arbitrators to do so and this nomination should be approved by the Council. If the arbitrators do not agree on this, then the Council shall appoint the third arbitrator.

    The Council has the authority not to approve the arbitrators nominated by the parties in accordance with the provisions of the Rules.

The parties may nominate their arbitrators from the “List of the TOBB Arbitrators” or may

    choose any other person they trust, who has the qualifications specified within the Rules.

    The Council, when appointing or approving the arbitrators, takes into consideration the citizenships of the parties, the subject of the dispute, and the arbitrators being unrelated to the parties and independent.

    In case of disputes between a Turkish company and a foreign company, the sole arbitrator or the Chairman of the Arbitral Tribunal is appointed from another country, excluding the countries of the parties.

    The Arbitral Tribunal is assigned and authorized to conduct the trials within the shortest period of time possible, to hear the parties and witnesses when necessary, to appoint experts and to conclude the case within a maximum of one year period.

    The TOBB Arbitration Council, when approving the arbitrators nominated by the parties, takes into consideration their neutrality and competence on the subject.

    The arbitrators to be appointed by the Council are nominated from the legal professionals, the related professions, the persons practicing the subject business or profession and the businessmen who are indisputably respected.

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