In Turkey, there are numerous grey areas concerning the enforcement of foreign arbitral awards, especially given the lack of consensus in both the doctrine and judicial decisions. One of the ambiguities that parties encounter in practice is whether a finality certificate, demonstrating that an arbitral award is final, is necessary for the enforcement of a foreign arbitral award in Turkey. This article examines whether such a finality certificate is essential when enforcing foreign arbitral awards by considering the practices of the Court of Cassation and the doctrinal views.
Pursuant to Article 50 of International Private and Procedural Law No 5718 (the "IPPL"), for an arbitral award rendered in a foreign country to be enforceable in Turkey, an enforcement lawsuit must be filed and the award must be enforced by a competent court. The conditions for accepting an enforcement lawsuit and the enforceability of a foreign arbitral award in Turkey are set out in the IPPL and in the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention"). According to Article 1 of the IPPL and Article 90 of the Constitution of Turkey, the provisions of international agreements to which Turkey is a party hold the force of law and are applied with precedence. Therefore, arbitral awards rendered in countries that are parties to the New York Convention are enforced in accordance with the Convention's provisions, while those rendered in non-party countries are enforced according to IPPL provisions.
THE CONCEPT OF BINDING EFFECT UNDER THE NEW YORK CONVENTION
Article IV of the New York Convention lists the documents that must accompany a request for the enforcement of a foreign arbitral award before the courts of contracting states. Accordingly, the party seeking enforcement must submit to the court (i) the duly authenticated original award, or a duly certified copy thereof, and (ii) the original arbitration agreement, or a duly certified copy thereof. As such, a finality certificate is not listed among the documents required for an enforcement request. Furthermore, under Article V(1)(e) of the New York Convention, if the party against whom the award is invoked can prove that the award is not yet binding, or has been set aside or suspended in the country in which it was rendered, then enforcement may be refused.
Considering all these points, it is possible to conclude that the submission of a document proving the finality of the foreign arbitral award is not mandatory under the New York Convention. The doctrine also suggests that, since the New York Convention mentions "binding" rather than "final" in Article V(1)(e), a finality certificate is not required among the necessary documents.1
THE CONCEPT OF BINDING EFFECT UNDER THE IPPL
According to Article 62/1/h of the IPPL, which governs the grounds for refusing enforcement requests, if an arbitral award has not become final or enforceable or binding according to the law applicable to the award or the country where it was rendered, or if it has been set aside by a competent authority in the country where it was rendered, the enforcement request must be denied.
Unlike the New York Convention, the IPPL requires that the foreign arbitral award be not only "binding" but also "final". However, Article 60 of the IPPL, which specifies the necessary documents for the enforcement of foreign arbitral awards, does not mention a finality certificate.
Moreover, Article 53 of the IPPL explicitly requires a finality certificate for the enforcement of foreign court decisions. Therefore, although Article 62 stipulates that the arbitral award must be final for enforcement, it does not mandate the submission of any document to prove this. This approach aligns with the application of the New York Convention, which inspired the drafting of the IPPL.
THE APPROACH OF THE COURTS
The Court of Cassation has issued decisions that do not require the submission of a finality certificate concerning the binding requirement under the New York Convention. For instance, in a 2016 decision,2 the 15th Civil Chamber of the Court of Cassation upheld the local court's decision to enforce an arbitral award rendered in the Netherlands by recognising that the award had become final under Dutch procedural law.
In another decision,3 the 11th Civil Chamber of the Court of Cassation noted that the presence of a "final decision" notation on the foreign arbitral award indicated its binding nature and there was no mention of the expectation for the party seeking enforcement to provide a finality certificate.
Moreover, in another decision,4 the 11th Civil Chamber emphasised that "What is important in the application of the New York Convention is not the finality of the arbitral awards, but their binding nature for the parties", underscoring that fulfilling the binding criterion is independent of providing a document proving finality, with the New York Convention highlighting "binding" over "final".
Although both the doctrine and the Court of Cassation's decisions suggest that a finality certificate is not among the mandatory documents to be submitted with an enforcement request, recent decisions can be found where the enforcement request was denied due to the absence of a finality certificate. For example, in a 2024 decision,5 the Ankara Regional Court of Appeal upheld a local court's decision to reject the enforcement request due to the absence of a finality certificate, deeming it appropriate.
Likewise, in a 2018 decision,6 the 14th Commercial Court of First Instance in Istanbul rejected an enforcement request because a document/certificate proving the finality of the foreign arbitral award had not been provided. The decision in question was overturned by the Regional Court of Appeal and the Court of Cassation.
In conclusion, although the submission of a finality certificate is not mandatory for the enforcement of foreign arbitral awards under both the New York Convention and the IPPL, some courts continue to regard the absence of a finality certificate as grounds for refusing an enforcement request. While higher courts have overturned such decisions, indicating that the absence of a finality certificate should not be a reason for denial, it may be prudent for the party seeking enforcement to submit a finality certificate along with their request to avoid prolonging the judicial process.
Footnotes
1. Kaplan, Y. (2001). Evaluation of Finality and Binding Nature Criteria in Terms of the Enforcement of Foreign Arbitral Awards. Atatürk University Erzincan Faculty of Law Journal, Commemorative Issue for the 10th Academic Year of the AÜEHF, Vol: V, No: 1-4. p. 424
2. Court of Cassation 15th Civil Chamber decision numbered 2016/895 E. 2016/2050 K. dated 31 March 2016
3. Court of Cassation 11th Civil Chamber decision numbered 2018/2577 E. 2019/3958 K. dated 20 May 2019
4. Court of Cassation 11th Civil Chamber decision numbered 2017/3469 E. 2019/4259 K. dated 11 June 2019
5. Ankara Regional Court of Appeal 31st Civil Chamber decision numbered 2024/34 E. 2024/217 K. dated 22 February 2024
6. Istanbul 14th Commercial Court of First Instance decision numbered 2018/238 E. 2018/1092 K. dated 15 November 2018
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