Jurisdiction of Courts over Objections to Provisional Measures in International Arbitration
Introduction
The 6th Civil Chamber of the Court of Cassation ruled on October 12, 2022, that national courts have jurisdiction over objections to provisional measures in international arbitration disputes.1
There were conflicting decisions among different chambers of the Regional Courts of Appeal regarding whether objections to provisional measures in disputes subject to arbitration with foreign elements should be evaluated by the first instance court that issued the measure or the arbitral tribunal handling the main dispute.2 To resolve these contradictions, the President’s Board of the Istanbul Regional Court of Appeal applied to the Court of Cassation with decision number 2022/51 dated July 1, 2022.
Conflicting Decisions
45th Civil Chamber of the Istanbul Regional Court of Appeal Decision
In the dispute before the 45th Civil Chamber, after the first instance court issued a provisional measure, the parties proceeded to arbitration under the International Chamber of Commerce. When an objection was raised against the provisional measure, the local court decided that the arbitral tribunal should evaluate the objection. The 45th Civil Chamber examined whether the objection to the provisional measure should be assessed by the first instance court that issued the measure or by the arbitral tribunal handling the main dispute.
The Chamber evaluated the provisions on provisional measures and arbitration under the Code of Civil Procedure numbered 6100 (“CCP”). According to these provisions: (i) an objection to a provisional measure issued by a Turkish court should be evaluated by the Turkish court handling the main case, and (ii) in disputes without foreign elements as defined under the International Arbitration Law numbered 4686 (“IAL”) where the seat of arbitration is Turkey, the arbitral tribunal may modify or revoke the court-issued provisional measure.
The 45th Civil Chamber concluded that: (i) the annulment of a provisional measure issued by a Turkish court in an arbitration proceeding with foreign elements by the arbitral tribunal would interfere with the jurisdiction of Turkish courts, (ii) the provisions of the CCP on this matter do not apply to the case at hand, and (iii) objections to the provisional measure should be handled by the first instance court that issued the measure.
15th Civil Chamber of the Istanbul Regional Court of Appeal Decision
In the dispute before the 15th Civil Chamber, despite the application of Algerian law, the party requested a provisional measure to prevent the realization of letters of guarantee during the litigation process in Algeria. The local court accepted the provisional measure, which was then objected to by the defendant. The local court rejected the objection, and the defendant appealed this decision.
During the appeal, the 15th Civil Chamber ruled that: (i) under Article 6 of the IAL, a party may request provisional measures from courts before or during arbitral proceedings, and such a court decision does not violate the arbitration agreement as this is a statutory requirement, and (ii) since arbitral proceedings had already commenced before the first instance court’s rejection decision, the objection to the provisional measure should be decided by the arbitral tribunal that would handle the main case.
Review of the Court of Cassation
Due to the conflicting decisions between the 45th and 15th Civil Chambers, the matter was brought before the Court of Cassation. The Court emphasized the importance of provisional measures in arbitral proceedings and the limited jurisdiction of courts in this context.3 Provisional measures fall within the scope of temporary legal protections, and it is a common issue in practice to determine the appropriate authority to apply for such measures.
The provisions for temporary legal protections differ between the CCP and the IAL. While the CCP grants arbitral tribunals the authority to modify or revoke temporary legal protections issued by courts, the IAL does not provide such authority. Despite the general adoption of the IAL provisions in the arbitration-related sections of the CCP in 2011, a distinction was made for temporary legal protections. According to the Court of Cassation, this difference stems from the distinct characteristics of national and international arbitration and has not been eliminated in subsequent amendments to the IAL, indicating a deliberate legislative choice.
To resolve the conflict between the decisions of the 15th and 45th Civil Chambers, the Court of Cassation first assessed which law would apply. According to Article 1 of the IAL, the IAL applies to disputes with a foreign element where the seat of arbitration is designated as Turkey or where the IAL is chosen by the parties, arbitrator, or arbitral tribunal. In the disputed cases, although there were foreign elements, the place of arbitration was not designated as Turkey, nor were the other conditions for applying the IAL met. However, an exception in Article 1 of the IAL stipulates that Article 6 of the IAL applies to provisional measures in arbitrations with foreign elements, even if the place of arbitration is not Turkey. The Court determined that Article 6 of the IAL would apply to these disputes.
Article 6 of the IAL does not explicitly state which authority is competent to hear objections to provisional measures issued by Turkish courts. The Court of Cassation indicated that the general nature of international arbitration, the characteristics of temporary legal protections, and the content of Article 6 of the IAL must be jointly evaluated to conclude.
Under Article 6 of the IAL, an arbitral tribunal cannot issue provisional attachment or provisional injunction orders that require enforcement by executive bodies or other official authorities. Similarly, an arbitral tribunal cannot issue provisional measures or attachments binding on third parties.
In the disputes subject to conflict, the decision involved preventing the realization of a bank letter of guarantee, thus affecting the bank as a third party. The Court of Cassation held that issuing decisions affecting third parties, like banks, would violate the principle of relativity in arbitration and Article 6 of the IAL.
The Court of Cassation emphasized that under Article 6 of the IAL, provisional measures or attachments issued by courts before or during arbitration proceedings automatically cease if the arbitral tribunal rejects the main claim or if the arbitral tribunal's decision becomes enforceable. The preamble of this article indicates that such court-issued measures cannot be annulled by an arbitral tribunal’s decision but only cease under specific conditions outlined in the IAL. The Court concluded that an arbitral tribunal does not have the authority to modify or annul court-issued provisional measures.
Additionally, the Court of Cassation noted that the rule in the CCP, which states that the competent court for provisional measures before a case is filed should be the court that will hear the main case and thereafter the court where the main case is heard, does not apply in this context. According to Article 17 of the IAL, unless otherwise provided, the provisions of the CCP do not apply to matters regulated by the IAL. Court of Cassation stated that as there is no contrary provision in the IAL on this matter, the CCP’s provision does not apply.
Conclusion
In conclusion, the Court of Cassation ruled that despite the existence of an arbitration agreement, Turkish courts can issue provisional measures in disputes with foreign elements. Objections to such provisional measures should be evaluated by Turkish courts, regardless of whether arbitral proceedings have commenced.
- The 6th Civil Chamber of the Court of Cassation, dated 12.10.2022, 3529/4699.
- There is a conflict between the decision given in the Case No. 2017/825 of the 15th Civil Chamber of the Istanbul Regional Court of Appeal and the decision given in the Case No. 2020/2281 of the 45th Civil Chamber of the Istanbul Regional Court of Appeal.
- Erdem Kamiloğlu, Mehveş / Erdem, Orhan Emin: “Milletlerarası Tahkim Yargılamasında Mahkemelerin Yetkisinin Kapsamı ve Sınırları”, Festschrift for Prof. Dr. H. Ercüment Erdem, Volume 1, Istanbul 2023, pp. 675-681.
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