Recognition and Enforcement of Stockholm Arbitral Awards under Turkish Law

An assessment in light of Turkish Court of Cassation decisions

Recognition and Enforcement of Stockholm Arbitral Awards under Turkish Law An assessment in light of Turkish Court of Cassation decisions

Foreign arbitral awards rendered under the rules of the SCC Arbitration Institute may be recognised and enforced in Türkiye. Compulsory execution in Türkiye requires an enforcement judgment from the competent Turkish court. The Court of Cassation decisions examined below address the validity of the arbitration agreement, authority to represent a party, the binding effect of the award and public policy objections.

This article distinguishes awards rendered in SCC arbitration from awards rendered in UNCITRAL arbitration seated in Stockholm. It also examines decisions dismissing proceedings before Turkish courts on procedural grounds because of an arbitration clause, as these decisions concern the scope of the arbitration agreement that may subsequently be relevant to enforcement.

Legal basis for recognition and enforcement
Recognition enables a foreign arbitral award to have res judicata or conclusive evidentiary effect in Türkiye. Enforcement permits the award to be executed compulsorily in Türkiye. Article 63 of Law No. 5718 on Private International Law and International Civil Procedure (MÖHUK) makes recognition of foreign arbitral awards subject to the provisions governing their enforcement.

The 1958 New York Convention and Articles 60–63 of MÖHUK are relevant to foreign arbitral awards in Türkiye. Article 1(2) of MÖHUK preserves the provisions of international conventions to which Türkiye is a party. For awards falling within the New York Convention, the conditions for recognition and enforcement are assessed primarily under that Convention.

Article V of the New York Convention sets out grounds for refusal, including invalidity of the arbitration agreement, inability to present a case, an award exceeding the scope of the arbitration agreement and an award that is not yet binding. Arbitrability and public policy are also matters the court may examine on its own initiative. This review does not involve a fresh determination of the merits by the Turkish court.

Objections concerning authority to represent a party and the principle of good faith
The 11th Civil Chamber of the Turkish Court of Cassation (Yargıtay), in its judgment of 9 April 2004, docket No. 2003/6774 (E.), decision No. 2004/3751 (K.), addressed a defence concerning authority to represent a party in an SCC-related enforcement dispute. The first-instance court had refused enforcement because the representative who signed the arbitration clause lacked specific authority to do so.

The Court of Cassation considered both the performance of the contract and the defendant’s failure to object to the representative’s lack of authority despite having been notified repeatedly during the arbitration. It held that raising this defence only at the enforcement stage was contrary to the principle of good faith and reversed the refusal of enforcement.

In the subsequent stage of the same dispute, the 11th Civil Chamber of the Court of Cassation, by its judgment of 17 April 2007, docket No. 2005/14428 (E.), decision No. 2007/6022 (K.), affirmed the judgment granting enforcement in full of the final award of the Arbitration Institute of the Stockholm Chamber of Commerce dated 25 September 2000, case No. 097/1999.

These two judgments show that a defence concerning a representative’s authority cannot be assessed independently of the party’s conduct during performance of the contract and the arbitration.

Nevertheless, remaining silent during arbitration does not cure a lack of authority in every case. Performance of the contract, awareness of the arbitration and the timing of the objection were decisive in the particular dispute.

A recent judgment on binding effect and arbitration costs
The 6th Civil Chamber of the Court of Cassation, in its judgment of 21 April 2026, docket No. 2025/3784 (E.), decision No. 2026/1634 (K.), considered recognition and enforcement of an award rendered in UNCITRAL arbitration seated in Stockholm. As the judgment does not establish that the arbitration was institutionally administered by the SCC, it is examined here for its treatment of the conditions governing enforcement of foreign arbitral awards.

In arbitration based on the investment treaty between Türkiye and Turkmenistan, the Turkish investors’ claims were dismissed and arbitration costs and legal fees were awarded to Turkmenistan. Recognition and enforcement were sought in Türkiye for the part of the award dated 8 June 2015, case No. 2013/27, ordering payment of EUR 356,843.98 in arbitration costs and USD 700,000 in legal fees.

The first-instance court considered it sufficient under Article V(1)(e) of the New York Convention that the award was binding on the parties. This preserved the distinction between the finality requirement applicable to foreign court judgments and the binding effect of an arbitral award. Article 46 of the SCC Arbitration Rules 2023 likewise provides that an award is final and binding when rendered. The version of the rules applicable to each arbitration must be identified separately.

For the reciprocity requirement, the court relied on the fact that the award was made in Sweden and that Sweden is a party to the New York Convention. The objection concerning the date of Turkmenistan’s accession to the Convention was not treated as an obstacle to enforcement. This assessment illustrates the importance of the country in which the award was made when applying the reciprocity reservation.

Despite objections that the arbitration costs were excessive and that the allocation of liability among the debtors was unclear, enforcement of the particular costs ruling was held not to produce a result contrary to public policy. The Court of Cassation affirmed recognition and enforcement and stated that payments acknowledged to have been made by certain debtors under a settlement protocol would be taken into account at the execution stage.

The judgment shows that the operative part of an award dealing with arbitration costs and legal fees may also be enforced. It does not establish that every award of substantial costs or every unclear allocation of liability will be enforced. The part of the award for which enforcement is sought and the debtors’ respective liability must be explained in the particular case.

Supporting decisions on the scope of arbitration clauses
In the judgment of the 11th Civil Chamber of the Court of Cassation dated 6 June 2022, docket No. 2021/470 (E.), decision No. 2022/4492 (K.), compensation was sought following non-renewal of a distribution agreement. The claimant framed its claim as liability based on good faith, independent of the contract. Nevertheless, a timely arbitration objection based on the clause selecting a Swedish seat and the arbitration institution of the Stockholm Chamber of Commerce was upheld, and dismissal of the court action on procedural grounds was affirmed. The legal characterisation of the claim did not remove the need to examine its connection with the contract.

In the judgment of the 19th Civil Chamber of the Court of Cassation dated 5 December 2019, docket No. 2018/939 (E.), decision No. 2019/5443 (K.), the claimant sought a declaration of ownership of goods to be delivered to the port of Bandırma. The contract provided for Swedish law and the Stockholm Arbitration Court under chamber of commerce rules. Although interim relief had been obtained in Türkiye for delivery, the arbitration clause was applied to the underlying dispute and procedural dismissal was affirmed. The judgment does not expressly identify the institution as the SCC.

The judgment of the 11th Civil Chamber of the Court of Cassation dated 26 March 2024, according to the date appearing in the judgment text, docket No. 2022/6009 (E.), decision No. 2024/2691 (K.), concerned claims for remuneration, agency indemnity and non-competition following termination of an agency agreement. The contract selected SCC rules but designated Lucerne, Switzerland, as the seat of arbitration. Taking account of the contractual definitions of the parties, the Court of Cassation affirmed procedural dismissal because of the arbitration clause.

This last judgment clearly illustrates that the administering institution and the seat of arbitration are distinct concepts. Selecting SCC rules does not necessarily make Stockholm the seat. These three decisions concern the application of arbitration clauses; they do not determine in advance whether a future arbitral award will satisfy the conditions for recognition and enforcement.

Drafting a Stockholm arbitration clause with enforcement in Türkiye in mind
Where enforcement in Türkiye is contemplated, the arbitration clause should be clear and workable from the time the contract is concluded. The SCC model arbitration clause may be used as a starting point, with the institution, seat and applicable rules specified in accordance with the parties’ choices.

Identify the institution and the seat expressly. Where SCC arbitration is chosen, the clause should identify the SCC Arbitration Institute and provide for application of the SCC Arbitration Rules. If Stockholm is intended to be the seat, the legal seat should expressly be stated as Stockholm, Sweden. Holding hearings elsewhere does not in itself change the legal seat. Türkiye’s reciprocity and commercial reservations to the New York Convention should also be considered.

Document the agreement in writing and define its scope. The parties’ intention to arbitrate should be recorded in writing, with a clear identification of the legal relationship covered. The scope of claims relating to performance, breach, termination or invalidity of the contract should be addressed. The parties’ corporate names should be recorded accurately; the extent to which a group company, agent or guarantor is bound by the clause requires separate assessment. Court jurisdiction provisions should also be drafted consistently with the arbitration clause.

Verify signing and representative authority. The authority of the signatory to bind the party to the arbitration agreement should be checked. The authority of a corporate organ should be assessed separately from representation under a power of attorney. Where an agreement is signed under a power of attorney, any specific authority required by the applicable law should be documented. Parties should not rely on an assumption that a lack of authority will later be overcome through the principle of good faith.

Address the relevant choices of law separately. The law governing the substance of the contract and the law governing the validity of the arbitration agreement may be expressly specified. Selecting Stockholm as the seat does not necessarily make Swedish law applicable to the substance of the contract. Under Article V(1)(a) of the New York Convention, the validity of the arbitration agreement is assessed primarily under the law to which the parties have subjected it or, absent such a choice, the law of the country where the award was made.

Protect proper appointment of arbitrators and the right to present a case. Agreeing on the number of arbitrators, the appointment procedure and the language of arbitration reduces uncertainty; those choices should be consistent with SCC rules. Notice addresses and communication procedures should be specified, and evidence of notices sent during the arbitration retained. Each party should receive an equal and reasonable opportunity to present its case. Irregular constitution of the tribunal or an inability to present a case may lead to refusal of enforcement.

Respect arbitrability and public policy limits. The subject matter must be capable of resolution by arbitration under Turkish law. In addition, the effects of recognition or enforcement in Türkiye must not be contrary to public policy. A contractual statement that the award is final, binding or enforceable in Türkiye does not exclude judicial review of these matters.

Preparing the enforcement application
The party seeking enforcement must submit the arbitration agreement and award in the required original or certified-copy form, together with the necessary Turkish translations. The seat, applicable rules, binding effect of the award and any proceedings for setting aside or suspension should also be explained. In disputes over representative authority, notices and the parties’ conduct during the proceedings are important alongside signing and authority documents.

The decisions examined show that an award rendered in SCC arbitration can be enforced in Türkiye and that Turkish courts give effect to Stockholm-related arbitration clauses. Assessment of a particular case nevertheless requires examination of the wording of the clause, the scope of the obligation awarded and the grounds for refusal raised.

Conclusion
Foreign arbitral awards rendered in SCC arbitration may be recognised and enforced in Türkiye under the New York Convention and the relevant provisions of Turkish law. The cases examined show that objections to representative authority are assessed in light of the parties’ conduct, binding awards are given effect, and costs rulings can also be enforced. The grounds for refusal and the part of the award to be executed must be assessed separately in each case.

For parties contemplating execution in Türkiye, preparation should begin when the arbitration clause is incorporated into the contract. Express selection of the institution and seat, conclusion of a valid written agreement by authorised persons, definition of the scope of disputes and protection of the right to present a case throughout the arbitration reduce enforcement risks. A properly drafted clause does not by itself guarantee enforcement, but it is important in preventing later objections concerning validity, authority and procedure.

Decision sources and citation notes
The 2004 and 2007 judgments are stages of the same enforcement dispute. The 2004 judgment was examined through a published copy. The 2007 judgment was examined through the text quoted in the decisions of the 45th Civil Chamber of the Istanbul Regional Court of Appeal dated 7 June 2023, docket No. 2020/1570 (E.), decision No. 2023/910 (K.), and docket No. 2023/312 (E.), decision No. 2023/318 (K.). These sources confirm the SCC award’s identity and docket No. 2005/14428.

The Court of Cassation judgments from 2019, 2022, 2024 and 2026 were examined in full on the official Yargıtay decision-search website. For docket No. 2022/6009 (E.), decision No. 2024/2691 (K.), the concluding part of the judgment bears the date 26 March 2024, while the official search-results list gives 2 April 2024.

Yargıtay decision search; 2004 judgment; BAM 45th Chamber 2020/1570 E 2023/910 K; BAM 45th Chamber 2023/312 E 2023/318 K.

New York Convention; SCC Rules 2023; SCC model clauses; UN treaty status and reservations; Law No 5718.