The Concept Of Foreign Arbitral Awards Under Turkish Law And The Applicable Recognition And Enforcement Regime

Introduction

To this day, the issue of nationality of arbitral awards has not been explicitly regulated by a positive legal norm under any national arbitration legislation or international treaty. Due to being a product of the efforts to reconcile two different approaches existing in the field of determining the nationality of arbitral awards, even the New York Convention dated June 10, 1958, which started off with the slogan of unifying the recognition and enforcement of international arbitral awards around the world, and thereby, increasing the effectiveness of international arbitration, cannot be argued to have fully clarified the concept of foreign arbitral awards.

Under national arbitration laws, nationality of arbitral awards is determined by interpreting the legal regulations concerning national and international arbitration, in particular, the legal provisions concerning the recognition and enforcement of foreign arbitral awards, as well as the international treaties that such state is a party to. For this reason, the question of whether an arbitral award is foreign or domestic may be answered differently by national legal systems. In practice, this situation brings about the risk of simultaneous intervention by multiple legal systems to an arbitral award. If, from the perspective of national law, there is a foreign arbitral award, then, in order for such arbitral award to create its legal consequences and gain enforceability in that state, such foreign arbitral award is required to be recognized and enforced subject to the laws of such state.

There are two traditional approaches in the field of categorization of arbitral awards as domestic and foreign. The first is that, if the procedural law applicable to the arbitration process (arbitration law) is a foreign law, then, the arbitral award made as a result of such arbitration process is categorized as a foreign arbitral award. This theory is called the "procedure theory" or the "procedural theory", or "authority law criteria". Whereas, the opposite view takes the place where the arbitration process mainly took place or the place where the arbitral award was actually made as the determinant criteria in identifying the nationality of an arbitral award. Pursuant to this view, if an arbitral award was mainly made as a result of proceedings that took place within the sovereign territory of a state or made in a foreign territory, then such award is categorized as a foreign arbitral award. Therefore, the nationality of arbitral awards is determined by an objective criterion that stems from the territoriality principle. For this reason, such theory is generally called "territoriality theory" or "principle of territoriality".

Due to its controversial nature, the issue of nationality of arbitral awards has been approached by the arbitration law doctrine from a number of different perspectives and has become subject of many scientific studies. However, during the period following the promulgation of the UNCITRAL Model Law in 19851 ("Model Law"), as a result of importation of the provision concerning the scope of application (art. 1) of the Model Law and thereby the "strict territoriality principle" by many national jurisdictions, it seems that, at least for such states that have adopted the Model Law as a whole, the discussion has been vastly overcome and the problem has been resolved. The solution introduced by the Model Law in terms of nationality of arbitral awards may be summarized as follows:

Arbitral awards passed as a result of arbitration proceedings where the place of arbitration determined by the parties or the arbitral tribunal (virtual place of arbitration) is situated in a foreign state, are foreign arbitral awards; whereas, arbitral awards passed as a result of arbitration proceedings where the place of arbitration is within the territory of that state are domestic arbitral awards. In other words, the procedure theory has entirely lost its validity under the laws of states, which has adopted the Model Law system. Indeed, pursuant to the strict territoriality principle, when the place of arbitration is situated in a Model Law state, the parties or the arbitral tribunal do not have the opportunity leave out the laws of the place of arbitration entirely and apply a foreign procedure law. On the other hand, in cases where the place of arbitration is situated outside of a Model Law state, the parties cannot, by way of entirely leaving out the (foreign) laws of the place of arbitration and deciding to apply the norms of the Model Law to such arbitration proceedings, attribute such arbitration proceedings a domestic (national) arbitration quality. Such restrictions imposed for predictability and clarity purposes are the reason why this principle is called the "strict" territoriality principle.

With the adoption of the Model Law approach, and thereby, the strict territoriality principle, on one hand, the scope of application of national arbitration laws was precisely defined, and on the other hand, definitive solutions were provided for the everlasting discussions on important questions such as which arbitral awards may be cancelled or are required to be recognized and enforced by the courts of which state. Thus, the arising of a conflict of venue between the courts of states has been significantly prevented.

When this issue is reviewed from the perspective of Turkish Law in respect of the legislation and precedents, the emerging legal picture is different than the states, which adopted the Model Law approach in entirety. The reasons and consequences of this situation are laid down in this study.

II. Scope of Application of the International Arbitration Law

Accurate presentation of the concepts of domestic and foreign arbitral awards under Turkish Law may be possible by initially determining the scope of application of the International Arbitration Law dated June 6, 2001 and numbered 4686 ("IAL") in terms of geography and subject matter. For this reason, a general overview of the scope of application of the IAL is provided briefly, hereinbelow.

1. Foreign Element Criteria

The IAL shall only apply to the resolution of disputes of an international nature through arbitration. In the IAL's text, the internationality of the arbitration is defined by the concept of foreign element. Under Turkish arbitration law, there is no foreign element criteria other than the elements listed under the Law, which can confer an international nature upon arbitration. When the criteria set forth in the IAL for the existence of a foreign element is reviewed, it is seen that this criteria do not only concern the arbitration proceedings, but also, and in fact, predominantly, concern the content of the dispute and the underlying legal relationship. Such regulation of the IAL is a hybrid regulation, which collectively includes formal and material reference points in terms of international private law. With this preference, the Turkish lawmaker has, in parallel with the Model Law, explicitly rejected the thesis adopted by the Swiss law, which state that arbitration may attain internationality due to merely formal criteria.

The IAL shall be applicable: (i) where the place of arbitration is determined to be within Turkey or (ii) if the determined place of arbitration is not within Turkey, or even the place of arbitration has not yet been determined, where the provisions of the IAL are chosen as the governing law by the parties or the arbitral tribunal.

In both cases, it is generally accepted that existence of a foreign element is a mandatory requirement in order for the IAL to be applicable. The IAL shall not be applicable in the absence of any foreign element within the meaning of article 2 of the Law, or in other words, where there is merely a domestic dispute. For this reason, the parties are not capable of attributing internationality to a domestic arbitration by coming to an agreement with each other and thereby making the arbitration subject to the provisions of the IAL. Therefore, in our opinion, under Turkish Law, settlement of merely domestic disputes through arbitration and enforcement of awards made as a result of such proceedings shall in any event be subject to the provisions concerning arbitration of the Civil Procedure Code (art. 407 et seq.).2

Another important issue in terms of the scope of application of the IAL is that, arbitration proceedings where Turkey is designated as the place of arbitration cannot be made entirely subject to a foreign arbitration law by the parties (IAL art. 8). Pursuant to the imperative provisions of the IAL, the IAL shall apply to all arbitration proceedings whose place of arbitration is situated in Turkey (IAL art. 1 para. 2). On the contrary, in the arbitration practice, the parties may decide to apply a foreign arbitration law, despite having designated a place of arbitration within Turkey. In such case, provisions of the said foreign arbitration law shall be applicable to the arbitration proceedings as part of the arbitration agreement between the parties, provided that they do not contradict with the mandatory provisions of the IAL. However, even in such case, such arbitration shall not loose its characteristic as a Turkish arbitration that is subject to the IAL.

2. The Concept of (Virtual) Place of Arbitration

Pursuant to the IAL, the place of arbitration, which is one of the determinant criteria for the scope of application of the IAL, is determined by the parties in an entirely free manner or by the arbitral tribunal, in the absence of an agreement between the parties to such end, by taking into consideration the conditions of the circumstances.

Arbitration proceedings do not necessarily need to be actually conducted at the place of arbitration determined by the parties or the arbitral tribunal, and even the arbitral award is not required to be made at the place of arbitration. In this respect, the concept of place of arbitration expresses a merely abstract reference point.3As a matter of fact, the arbitrators and the parties may have not even once been to the place of arbitration throughout the arbitration proceedings. In consideration of these characteristics, for the purpose of the IAL, place of arbitration means a virtual place of arbitration, which may, if desired, be determined by the parties or the arbitral tribunal, independently from all physical facts.

3. Principle of “Virtual Territoriality”

With the entry into effect of the IAL and thereby importation of the concept of virtual place of arbitration by Turkish arbitration law, Turkey, like all other Model Law states, has adopted the territoriality principle specific to arbitration law. Based on the concept of virtual place of arbitration, we call this territoriality principle based on the place of arbitration specific to arbitration, the "principle of virtual territoriality"4.

According to the said principle, all arbitration proceedings where the place of arbitration is determined to be within Turkey (and in the meantime which have a foreign element) are in any event subject to the provisions of IAL.5 However, in light of the new function that the concept of place of arbitration has gained with the entry into effect of the IAL, this does not mean that all arbitration proceedings actually conducted in Turkey will be subject to the provisions of the IAL. The only determinant factor is whether or not the (virtual) place of arbitration designated by the parties is within Turkey. If the virtual place of arbitration has not been determined, then the place where the arbitration proceedings mainly took place and where the arbitral award is actually made have no legal function in terms of applicability of the IAL. In our opinion, the IAL has particularly refrained from setting forth this type of a secondary reference point.

4. The Concept of Commercial Arbitration

Taking into consideration the different interpretations of the concept of commercial arbitration in the doctrine as well as the difficulty of identifying its context,6 contrary to the Model Law, the Turkish lawmaker has not limited the scope of application of the IAL to commercial arbitral disputes. This preference of the lawmaker prevents the emergence of problems regarding the scope of application in practice, which may arise from the interpretation of the concept of commercial arbitration, and also provides unification for commercial–noncommercial disputes under Turkish arbitration law. However, as will be further explained below, due to the reservations brought by Turkey at the stage of joining the New York Convention, the concepts of "commerciality", and therefore, "commercial arbitration" still have an importance today, although to a limit, in terms of nationality of foreign arbitral awards under Turkish laws. The function of the concept of commercial arbitration under Turkish Law is set forth under the heading of "nationality of arbitral awards" below.

III. Foreign Arbitral Awards under Turkish Law

Meaning of the "place where arbitral award is made"

As mentioned above, with the IAL, Turkish arbitration law has adopted the principle of virtual territoriality. As a result of this, today, if the place of arbitration is within Turkey, parties' agreement to apply a foreign arbitration (procedural) law does not eliminate the arbitration proceedings' national arbitration character. Accordingly, recognition and enforcement of "arbitral awards made in Turkey" pursuant to the 2nd sentence of paragraph 1 of article 1 of the New York Convention, is, under no circumstance, possible. This type of arbitral decisions are, in any event, categorized as domestic arbitral awards and enforced in Turkey under the Turkish legal provisions.

The matter that needs to be addressed within this context is what should be understood by "an arbitral award made in Turkey" for the purpose of the New York Convention. The answer to this question will no doubt be determinant for the Turkish court practice. The New York Convention does not answer this important question. In Turkish arbitration law, just like other national legislations, there is no explicit legal regulation that clearly answers the question.

During the period that the place of arbitration did not have today's legal function in determining the place where the arbitral award was made, in terms of arbitration law, the criteria of "place of signature of the arbitral award"and "place where the arbitration proceedings mainly took place" were used. However, the application of, in particular the widely implemented first criterion, has brought about many unsolvable problems in application to a concrete case. The main criticism directed at the "place of signature" criterion was that its application often led to incidental results. The general concern regarding the second criterion was, in particular, the difficulties experienced while determining this place, in the face of technological developments.

Today, in the foreign legal doctrine and court practice, what is understood from the concept of "place where the arbitral award is made" is the (virtual) place of arbitration, freely determined by the parties (or the arbitral tribunal).7 Although the determined place of arbitration generally overlaps with the place where the arbitration proceedings mainly take place, such a relationship is not mandatory. If such places are situated in different countries, then, the virtual (determined) place of arbitration will be determinant. The fact that the parties or the arbitrators do not carry out the proceedings in the place of arbitration, or even have not once visited it, does not have a role in the determinant effect of the virtual place of arbitration. Whether or not the arbitral award is signed at the place of arbitration, designated by the parties in an entirely formal manner, does not have any importance or legal function either.

Such an approach also complies with the fundamental principles of modern international arbitration law approach, which provide a broad discretion and maneuver room to the parties in choosing the procedural law to be applied to the arbitration proceedings as well as the formation of the arbitration proceedings. Accordingly, the foreign or domestic character of the arbitral award is determined by the parties, subjectively. Parties (or arbitral tribunal) are given the authority to mutually determine the nationality of the arbitral award by determining the place of arbitration. The goal of this approach is, beyond doubt, to provide the unification that is aimed for the scopes of application of national arbitration laws, also in the area of determining the nationality of the arbitral awards in light of the virtual territoriality principle. Such an approach largely eliminates, particularly for the parties of the arbitration agreement, the ambiguity of the former law in terms of nationality of arbitral awards. On the other hand, another consequence of this approach is the clear outlining of the boundaries of authority of enforcement courts and national courts that will address the cancellation actions (or appeal claims).

In light of the principle of general interpretation stated in article 31 of the Vienna Convention on the Law of Treaties dated 1969, which concern the interpretation of international treaties, such an interpretation of the concept of "place where the arbitral award is made" contained in the New York Convention is also in harmony with the goal of unification of member states' recognition and enforcement laws, which is the fundamental purpose of the New York Convention.

In our opinion, the legal ground of this approach under Turkish Law is laid down in subparagraph A of article 14 of the IAL.8 The said provision governs the mandatory content and form of arbitral awards. However, the "place where the arbitral award is made" is deliberately excluded from the legal elements, which have been listed in an exhaustive manner. On the other hand, it is made legally mandatory to state the "place of arbitration" in the arbitral award. It is unimaginable that the Turkish lawmaker has neglected to include such an important matter. Exclusion of the concept of place where the arbitral award is made in the provision concerning arbitral awards while listing the place of arbitration as a mandatory element, is, beyond doubt, an expression of a deliberate choice made by the lawmaker. Whereas, the place of arbitration mentioned in the relevant provision undoubtedly refers to the (virtual) place of arbitration determined by the parties, or if not, by the arbitral tribunal. Major consequence of this is that the actual place where the arbitral award is made has no legal function from the perspective of a Turkish judge. In fact, pursuant to the law, the arbitral award is deemed to be made at the place of arbitration. The State court judge will no longer be required to investigate the actual place where the arbitral award was made or where the majority of the arbitral proceedings took place; indeed, in our opinion he does not have such authority.

In light of these findings, it can be said that the above mentioned provision of the IAL has two fundamental functions: First of these functions is to facilitate the determination of the place of arbitration at the right time, and thereby to clarify the control power, which Turkish courts have pursuant to the IAL art. 15; whereas the other is to enable the determination of the nationality of an arbitral award as easily as possible, without having to investigate the actual place of arbitration.

With this provision, which is in accordance with the Model Law, the Turkish lawmaker has clearly set forth that, in any event, the place where the arbitral award is made overlaps with the place of arbitration, and that, the parties' wills are singlehandedly determinant without any further investigation. In conclusion, in our opinion, under Turkish arbitration law, the place of arbitration and the place where the arbitral award is made can by no means be different places. This fundamental principle must be adopted both for national/domestic and for foreign arbitrations.

2. Nationality of an Arbitral Award

As mentioned above, once it is acknowledged that the place of arbitration and the place where the arbitral award is made overlap without exception, categorization of an arbitral award under the current legislation as a foreign or a domestic (national) arbitral award, will be as follows:

A. If the place of arbitration determined by the parties or the arbitral tribunal is outside of Turkey and if the parties (or the arbitral tribunal) have decided that a foreign procedural law is to be applied, then; for the purpose of Turkish Law, the arbitral award to be made at the end of the arbitration in question is always a foreign arbitral award. If, (i) the dispute subject to arbitration is of a commercial nature and (ii) the place of arbitration is within the territory of a member state to the New York Convention, then; such arbitral award shall be enforced in Turkey in accordance with the provisions of the New York Convention. In cases where either of these conditions are not met, and therefore the New York Convention will be not applicable before Turkish courts, then; such arbitral award shall be enforced in Turkey, in accordance with the provisions of articles 60-63 of the International Private and Civil Procedure Law.

B. In an arbitration, which contains a foreign element pursuant to the IAL art. 2, if the place of arbitration determined by the parties or the arbitral tribunal is within Turkey, then; the arbitral award in question is always a foreign arbitral award before Turkish courts. Because, arbitrations whose place of arbitration is in Turkey are always and mandatorily subject to the provisions of the IAL, pursuant to paragraph 2 of article 1 of the IAL. In other words, in such case, the governing law of the arbitration (lex arbitri) is always Turkish law (the IAL). Agreement of the parties to the contrary does not play a role on the nationality of the arbitral award.

C. If the place of arbitration determined by the parties or the arbitral tribunal is outside of Turkey and if, pursuant to paragraph 2 of article 1 of the IAL, the parties have decided that Turkish procedural law (provisions of the IAL) is to be applied, then; two different alternatives should be considered:

Such arbitral award is a foreign arbitral award. If;

i. the place of arbitration is within the sovereign territory of a member state to the New York Convention        (Reciprocity reservation) and

(+)

ii. the dispute is of a commercial nature pursuant to Turkish law (Commerciality reservation).

In cases where both of the positive conditions arising from the reservations raised by Turkey to New York Convention are present, and thereby, the New York Convention becomes applicable before a Turkish Court, since, in light of the prevailing opinion in the Turkish doctrine as well as the established precedents of the Supreme Court, it is mandatory for Turkish judges to apply the New York Convention, recognition and enforcement of the arbitral award will be subject to the provisions of the New York Convention.

Such arbitral award is a domestic (Turkish) arbitral award. If;

(i) the place of arbitration is not within the sovereign territory of a member state to the New York Convention (Reciprocity reservation)

or (+)

(ii) the dispute is not of a commercial nature pursuant to Turkish law (Commerciality reservation).

In both cases, the New York Convention does not become applicable before a Turkish court due to Turkey's reservations. In such case, in light of the procedural law theory (authority law criteria) adopted by the established decisions of the Supreme Court, in accordance with the IAL art. 1 para.2, the arbitral award made at the end of an arbitration conducted subject to Turkish law will be categorized as a domestic arbitral award.

IV. Conclusion

When evaluated together with the scope of application of the IAL, the main conclusions reached concerning the concept of a foreign arbitral award under Turkish Law and the applicable recognition and enforcement regime may be stated as follows:

1. With the promulgation of the IAL and the adoptation of the principle of virtual territoriality by Turkish arbitration law, the provision laid down in the 2nd sentence of paragraph 1 of article 1 of the New York Convention in favor of the procedure law theory, has, after France and Germany, which were among the main defenders of the procedure law theory, ceased to have any function in theoretic platform for Turkey. Because, pursuant to the IAL, all arbitral awards made as a result of arbitrations whose place of arbitration is within Turkey, are categorized as domestic arbitral awards and these can no longer be categorized as foreign arbitral awards. These types of arbitral awards are enforced in accordance with the provision of IAL or the CPC, depending on the existence of a foreign element.

2. Today, 'the place where the arbitral award is made' within the meaning of the New York Convention has been identified with the concept of virtual place of arbitration, both in the foreign doctrine and the practices of foreign courts, in line with the modern arbitration law's approach that grants absolute advantage to the parties' wills. In other words, an arbitral award is deemed to be made, within the meaning of the New York Convention, at the place of arbitration determined by the parties, or in the absence of such an agreement, by the arbitral tribunal. This approach shows that, contrary to the former law, today's modern arbitration law acts upon the parties' subjective wills instead of objective criteria when determining the nationality of arbitral awards. Such an interpretation of the New York Convention is also in harmony with the aim of facilitation and unification of the recognition and enforcement of arbitral awards around the World, which is one of the essential goals of the relevant international treaty.

3. Even though the scope of application of the IAL in terms of subject matter, is not limited to commercial arbitration, as the New York Convention is only applicable to commercial disputes in Turkey, there is a duality, at least in a theoretical platform, in the area of determination of the nationality of arbitral awards under Turkish law and the applicable recognition-enforcement regime. According to this;

Arbitral awards, which concern commercial disputes and are made outside of Turkey however inside the sovereign territory of a member state to the New York Convention, are always considered foreign arbitral awards for purpose of Turkish law. These types of arbitral awards are enforced in Turkey pursuant to the provisions of the New York Convention.

Since arbitral awards, which do not concern commercial disputes or are made outside of Turkey and the sovereign territory of a member state to the New York Convention, do not fall into the scope of application of the New York Convention for Turkey, in light of the authority law criteria adopted by the established precedent of the Supreme Court since 1949 to this day, these may be categorized as foreign or domestic arbitral awards, depending on the procedural law applied to the arbitration proceedings. Accordingly, arbitral awards, which are made outside of Turkey and which, based on Turkey's reservations, fall outside the scope of application of the New York Convention shall be considered as domestic, if made as a result of an arbitration conducted pursuant to Turkish procedural law, and as foreign, if made as a result of proceedings conducted pursuant to a foreign procedural law. In other words, where the New York Convention is not applicable under the Turkish national law, the authority law criteria still remains effective.
As a result of this duality, while one of the two arbitral awards made as a result of arbitration proceedings conducted subject to the provisions of the IAL, may, due to Turkey's reservations regarding the New York Convention, fall outside the scope of application of that treaty and, in light of the procedure law theory, be subject to the provisions regarding cancellation actions of the CPC; on the contrary, the other arbitral award, which falls within the scope and scope of application of the New York Convention, may be categorized as a foreign arbitral award. In case of the latter, recognition and enforcement of such arbitral awards before Turkish courts in accordance with the provisions of the New York Convention will be mandatory.

When viewed from this perspective, "reciprocity" and "commerciality" concepts still play a determinative role in determination of the nationality of arbitral awards under Turkish law. Determination of the reciprocity condition does not create a significant problem for the parties, as it is easy to find out whether or not the country of the place of arbitration designated by the parties is a party to the New York Convention. On the contrary, the context of the term 'commerciality" will be determined pursuant to paragraph 3 of article 1 of the New York Convention. In certain cases, this may create a confusing contradiction of terms issue, in particular for the foreign parties of the dispute.

It is clear that, in any event, this creates ambiguity for a foreign party who demands enforcement before a Turkish court pursuant to the New York Convention believing that an arbitral award is a foreign arbitral award, and damages reliability of law, which has substantial importance for the parties of an international arbitration. Besides, there is no doubt that this also contradicts with the main goal of the Turkish lawmaker, who, by importing the concept of virtual place of arbitration and the virtual territoriality principle, has taken a significant step towards the aim of unification in light of the Model Law.

The possible reason why this duality, which arises out of continuing to follow the procedure law theory adopted in light of the legislation and the established precedents of the Supreme Court was not reflected in the Supreme Court's precedents until today, may be explained, on one hand, by the fact that majority of disputes that constitute the subject matter of international arbitrations stem from legal relationships with a commercial nature, while on the other, that, the reciprocity reservation is not invoked in most concrete cases, due to the rapid increase in participation to the New York Convention. There is no doubt that another actual reason for this is the fact that, in practice, parties rarely exercise the opportunity to elect the applicable law granted to them, which has come up during the preparatory works of the Model Law.

Two different solutions may be proposed in order to eliminate this duality in Turkish law in the matter of determination of the nationality of arbitral awards due to the scope of application of the IAL and the reservations brought by Turkey against the New York Convention.

First suggestion is that, Turkey withdraws the two reservations it has brought up at the stage of signing of the New York Convention, and thereby, to fully unifies the scope of application of the provisions concerning enforcement of the New York Convention and the IPCPL. In such case, all arbitral awards made as a result of arbitration whose places of arbitration are outside of Turkey will, pursuant to paragraph 1 of article 1 of the New York Convention, in any event, remain within the scope of the New York Convention for Turkey and these arbitral awards will be enforced before Turkish courts in accordance with the provisions of the New York Convention. However, in such case, as, in light of the established precedents of the Supreme Court, the New York Convention will always prevail over the provisions of the IPCPL, national recognition and enforcement regulations will no longer have any function.

The second solution is that, the Supreme Court entirely and explicitly abandons the procedure law theory (authority law criteria) which it has been following by the Supreme Court since 1949 until today in respect of the determination of the nationality of arbitral awards, for all arbitral awards, which are and are not subject to the New York Convention. Indeed, in the face of the legislations in effect today, the possibility for the Supreme Court to continue applying the authority law criteria in determining the nationality of arbitral awards subject to the New York Convention is no longer available. In our opinion, for the purpose of the nationality of arbitral awards, which are not subject to the New York convention, it is quite difficult to defend the existence of a legitimate ground in terms of legal technique or legal policy, to resort to a criterion that is different than the criteria applied to arbitral awards that fall within the scope of the convention.

Both of the aforementioned solutions will, undoubtedly, serve to Turkey's benefit in becoming an arbitration country that is equally reliable as modern arbitration countries, which are parties to the New York Convention, in terms of law of recognition and enforcement.

Footnotes

1 Full title of the text of this model law, which has been adopted by the United Nations Commission on International Trade Law on December 11, 1985 under the United Nations General Assembly Decision numbered A/RES/40/72 and which was basically recommended to all member states for the purpose of unification of international arbitration and modernization of national arbitration laws, is "UNCITRAL Model Law on International Commercial Arbitration".

2 Prevailing opinion: Ekşi, N., Milletlerarası Tahkim Kanunu Hakkında Genel Bir Değerlendirme, Prof. Dr. Gülören Tekinalp'e Armağan, MHB V. 23, 2003/1-2, Istanbul 2003, p. 303; Nomer, E./Ekşi, N./Öztekin-Gelgel, Ö., Milletlerarası Tahkim Hukuku, Istanbul 2008, p. 28; Deren-Yıldırım, N., Milletlerarası Tahkimin Esaslı Sorunları, Istanbul 2004, p. 18-19; Tanrıbilir F.B / Şit B., Milletlerarası Tahkim Müessesi ve Yeni Milletlerarası Tahkim Kanunu, 22 MHB 2002/2, Istanbul 2002 p. 828; Kocasakal , Ö.H., Milletlerarası Tahkim Kanunu'nun Uygulama Alanının Belirlenmesi, Prof. Dr. Seliçi'ye Armağan, Ankara 2006, p. 350; Ergönen, O., 10. Yılında Milletlerası Tahkim Kanunu'nun Uygulama Alanı, Legal Medeni Usul ve İcra-İflas Hukuku Dergisi, 2011/3, p. 173-182. For dissenting opinion, see: Kalpsüz, T., Türkiye'de Milletlerarası Tahkim, Ankara 2010, p. 27-28, Akıncı, Z.: Milletlerarası Tahkim, Istanbul 2007, Marginal No. 146 (despite criticism). Even though it does not clearly set forth the court's opinion regarding the matter, for a Supreme Court decision supporting the dissenting opinion, see. 15. Civil Chamber d. 27.06.2007, E. 145 - K. 4389 (Ekşi, N.: Milletlerarası Nitelikli Davalara İlişkin Mahkeme Kararları, Istanbul 2007 p. 54-58).

3 Nomer/Ekşi/Öztekin-Gelgel, Milletlerarası Tahkim, p. 29. Dissenting. Kalpsüz, Milletlerarası Tahkim, p. 37; Akıncı, Milletlerarası Tahkim, Kn. 398; Ergönen, Uygulama Alanı, p. 159.

4 In the English arbitration doctrine, the term "seat theory" (Redfern, A./ Hunter, M., Law and Practice of International Commercial Arbitration London 2005, Kn. 4 et seq.), and in the German doctrine, the term schiedsrechtliche Sitztheorie" (Steinbrück, B., Die Unterstützung ausländischer Schiedsverfahren durch staatliche Gerichte, Tübingen 2009, p. 22) was suggested for this modern territoriality principle specific to arbitration. For detailed explanation on the concept of virtual territoriality principle, see. Ergönen, Uygulama Alanı, p. 161 et seq.

5 Supporting opinion: Akıncı, Milletlerarası Tahkim, Kn. 136; Şanlı, C., Uluslararası Ticari Akitlerin Hazırlanması ve Uyuşmazlıkların Çözüm Yolları, Istanbul 201, p. 239-240; Nomer/Ekşi/Öztekin-Gelgel, Milletlerarası Tahkim, p. 28; Kalpsüz, Milletlerarası Tahkim, p. 16; Şanlı, Uyuşmazlıkların Çözümü, p. 237-238. Dissenting opinion: Kocasakal, Uygulama Alanı, p. 359: The Author states that the provision regarding the scope of application of the Law is not of an imperative nature, and that the parties may agree to apply a foreign procedure law. The author also states that restriction of the freedom of the parties to determine the rules pertaining to the arbitration proceedings under IAL art. 8 by the imperative norms of the IAL, is not compatible with the principle of freedom of will. In our opinion, this approach of the author conflicts with the virtual territoriality principle, which is one of the fundamental principles of the Model Law.

6 On this subject, for discussions held during the preparatory work for the IAL, see. Problems and Suggestions for Turkish Law on the Matter of International Arbitration – Turkish Arbitration Law and UNICITRAL Model Law, Is a Legal Regulation on International Arbitration Necessary Symposium Memorandum Discussions, Ankara 1997, Vol II, p. 74-90.

7 i.e. Adolphen, MüKo-ZPO, Art § 1061 Anh. 1 Kn. 13; Schlosser, Stein/Jonas ZPO, § 1061 Kn. 18; Solomon, Verbindlichkeit von Schiedssprüchen, p. 62; Berger, Wirtschaftsschiedsgerichtsbarkeit, p. 77; Mann, Nationalität des Schiedsspruchs, p. 221-222.

8 Similarly, Civil Procedure Code art. 436/f. 1 b. (e). Such provision concerning domestic arbitration has importance in determination of the court of jurisdiction in matters to be decided by the courts, specifically cancellation actions, within the scope of arbitration (CPC art. 410).