Enforcing an VIAC Award (Vienna) in Turkey

To enforce a VIAC award in Turkey, the award creditor must apply to a Turkish civil court of first instance under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, to which Turkey is a party. Turkey ratified the Convention with two reservations - the reciprocity reservation and the commercial reservation - both of which affect the admissibility of your application. The process involves filing a recognition and enforcement (exequatur) petition, serving the opposing party, and obtaining a court order before any assets can be seized. This guide explains the full procedure, the documents required, the defences the award debtor may raise, realistic timelines, cost levels, and the practical steps that experienced practitioners take to maximise the chances of a successful outcome.

Turkey acceded to the New York Convention with two important reservations that every award creditor must understand before filing.

The reciprocity reservation means Turkey will only recognise and enforce foreign arbitral awards made in states that are also parties to the Convention. Austria, where VIAC is seated in Vienna, is a Convention state, so this reservation does not block enforcement of a VIAC award. However, the award creditor's counsel should confirm the seat of arbitration in the award document, because Turkish courts will verify this at the outset.

The commercial reservation means Turkey limits Convention enforcement to disputes that Turkish law classifies as "commercial" in nature. This flows from the International Private and Procedural Law (MÖHUK, Law No. 5718) and from the Turkish Commercial Code. Disputes arising from commercial contracts, agency, distribution, construction, finance and similar relationships will generally satisfy this requirement. Disputes that Turkish law characterises as civil rather than commercial - for example, certain labour or consumer matters - may fall outside the reservation's scope, and the court may decline jurisdiction on that basis.

A common mistake is assuming that a valid VIAC award automatically passes through Turkish courts without scrutiny of these reservations. In practice, the petitioner's legal team should address both reservations expressly in the initial petition, citing the Austrian seat and the commercial nature of the underlying dispute, to pre-empt any preliminary objection from the debtor or the court itself.

The primary domestic statute governing recognition and enforcement of foreign arbitral awards in Turkey is MÖHUK (Law No. 5718 on International Private and Procedural Law). Articles 60 to 62 of MÖHUK set out the conditions for recognition and enforcement of foreign court judgments, while Articles 60 and 62 read together with the New York Convention govern arbitral awards. Where MÖHUK and the Convention overlap, the Convention prevails as the more favourable instrument under Article VII of the Convention itself.

The Turkish Code of Civil Procedure (HMK, Law No. 6100) provides the procedural rules that govern how the exequatur petition is filed, how hearings are conducted, and how the enforcement order (icra emri) is issued once the court grants recognition. The enforcement itself - attaching assets, freezing bank accounts, seizing property - is then carried out under the Enforcement and Bankruptcy Law (İcra ve İflas Kanunu, Law No. 2004).

The competent court for an exequatur application is the civil court of first instance (Asliye Hukuk Mahkemesi) at the place where the debtor is domiciled or where the debtor's assets are located in Turkey. If the debtor has no domicile in Turkey, the petitioner may file at the court of the place where enforcement is sought. Choosing the right court is a practical decision: courts in Istanbul and Ankara handle international commercial matters with greater frequency and tend to have more predictable timelines than courts in smaller jurisdictions.

A non-obvious requirement is that the petition must be filed in Turkish, and all supporting documents must be accompanied by certified Turkish translations. Foreign documents - including the award itself and the arbitration agreement - must also be apostilled under the Hague Apostille Convention, to which both Austria and Turkey are parties.

Assembling the correct document package before filing avoids delays that can add weeks or months to the process.

The core documents required under Article IV of the New York Convention are:

• The duly authenticated original award or a duly certified copy, with a certified Turkish translation.
• The original arbitration agreement (or a certified copy), with a certified Turkish translation.
• The apostille certificate issued by the competent Austrian authority, covering both the award and the agreement where required.

Beyond the Convention minimum, Turkish courts in practice also expect:

• A power of attorney for the Turkish counsel, notarised and apostilled.
• Proof of service of the award on the debtor during the arbitral proceedings, or a statement explaining how service was effected under the VIAC Rules.
• A brief summary of the arbitral proceedings, confirming that the debtor had proper notice and an opportunity to present its case.

Many practitioners underestimate the translation requirement. Turkish courts require translations by a sworn translator (yeminli tercüman) certified by a Turkish notary. Translations prepared abroad, even by qualified translators, are often rejected unless they carry a Turkish notarial certification. Arranging this before filing - rather than after the court raises an objection - saves significant time.

The VIAC Rules require the tribunal to send the award to the parties. Retaining proof of that transmission (for example, a courier receipt or email confirmation from the VIAC Secretariat) is useful evidence that the debtor received the award and that the enforcement application is timely.

Once the document package is complete, Turkish counsel files the exequatur petition with the competent Asliye Hukuk Mahkemesi. The petition sets out the factual background, identifies the award and the arbitration agreement, confirms the New York Convention basis, addresses the two Turkish reservations, and requests the court to issue a recognition and enforcement order.

The court first conducts a preliminary admissibility review. It checks whether the petition is formally complete, whether the court has territorial jurisdiction, and whether the Convention conditions are met on their face. If the petition is deficient, the court issues a notice to cure (eksiklik bildirimi), and the petitioner has a set period - typically one to two weeks - to remedy the deficiency.

Once the petition is admitted, the court serves it on the award debtor. The debtor then has a statutory period to file an opposition. Under Turkish procedural rules, the debtor's response period is generally two weeks from service, though courts may grant extensions. The debtor's opposition is the primary vehicle for raising the grounds of refusal under Article V of the New York Convention (discussed in the next section).

The court then schedules a hearing. In straightforward cases where the debtor does not oppose or raises only weak objections, courts sometimes decide on the papers without a full oral hearing. In contested cases, one or more hearings are held. The court does not re-examine the merits of the dispute; its review is limited to the Article V grounds and the Turkish reservations.

Once the court is satisfied, it issues a recognition and enforcement order. This order is the exequatur. With the exequatur in hand, the award creditor can instruct Turkish enforcement officers (icra müdürlüğü) to attach the debtor's assets, freeze bank accounts, or take other enforcement measures under the Enforcement and Bankruptcy Law.

In practice, founders and creditors should consider instructing Turkish counsel with specific experience in international arbitration enforcement, not merely general civil litigation experience. Courts in Istanbul's commercial districts, in particular, have developed a body of practice on New York Convention applications that experienced local counsel can navigate efficiently.

For guidance on structuring your enforcement strategy before filing, contact info@vlolawfirm.com. We can help structure the setup correctly the first time.

The award debtor in Turkey may oppose the exequatur petition on the grounds listed in Article V of the New York Convention. Turkish courts apply these grounds strictly and do not use them as a basis for reviewing the merits of the award.

The debtor-side grounds under Article V(1) include:

• Incapacity of a party or invalidity of the arbitration agreement under the applicable law.
• Lack of proper notice of the arbitral proceedings or inability to present the debtor's case.
• The award deals with matters beyond the scope of the arbitration agreement.
• The composition of the tribunal or the arbitral procedure was not in accordance with the parties' agreement or the law of the seat.
• The award has not yet become binding, or has been set aside or suspended by a competent authority at the seat.

The court-raised grounds under Article V(2) are:

• The subject matter of the dispute is not capable of settlement by arbitration under Turkish law.
• Recognition or enforcement would be contrary to Turkish public policy (kamu düzeni).

The public policy defence is the most frequently invoked ground in Turkish enforcement proceedings. Turkish courts have interpreted public policy narrowly in recent years, in line with the pro-enforcement trend among New York Convention states. However, awards that contain punitive damages elements, awards based on interest rates that Turkish courts consider excessive, or awards touching on matters reserved to Turkish administrative jurisdiction have occasionally faced public policy challenges. A well-drafted petition anticipates these arguments and addresses them proactively.

A practical scenario: a VIAC award ordering a Turkish distributor to pay damages and costs to an Austrian manufacturer will typically face no public policy objection. The commercial relationship is straightforward, the award is monetary, and the seat is a Convention state. Enforcement in this scenario is generally achievable within the timelines described below.

A second scenario: a VIAC award that includes an interest component calculated at a rate significantly above Turkish statutory rates may prompt the debtor to raise a public policy objection. Turkish courts have in some cases reduced the interest element while enforcing the principal sum. Counsel should assess this risk before filing and consider whether to address it in the petition.

The timeline for enforcing a VIAC award in Turkey depends on whether the debtor opposes the application and on the workload of the chosen court.

In uncontested cases - where the debtor does not file an opposition or files only a formal response - the exequatur order can be obtained in approximately three to six months from the date of filing. Courts in Istanbul's commercial districts tend to be at the faster end of this range for straightforward applications.

In contested cases, where the debtor raises Article V defences and requests hearings, the first-instance proceedings typically take between eight and eighteen months. If the debtor appeals the exequatur order to the Regional Court of Appeal (Bölge Adliye Mahkemesi) and then to the Court of Cassation (Yargıtay), the total timeline can extend to two to three years. Interim protective measures - discussed below - are therefore important in contested cases.

Court filing fees in Turkey are calculated as a proportion of the claim value and are set by the Court Fees Law (Harçlar Kanunu). They are generally moderate by international standards, though they increase with the size of the award. Professional fees for Turkish counsel vary by firm and complexity; for a contested enforcement matter in Istanbul, fees typically start from the low thousands of EUR and can rise significantly for multi-hearing proceedings. Translation and apostille costs add a further moderate amount depending on the volume of documents.

Many creditors underestimate the cost of the post-exequatur enforcement phase. Once the order is obtained, the creditor must instruct enforcement officers, identify and attach specific assets, and potentially deal with the debtor's challenges to individual enforcement acts. Budgeting for this phase separately is advisable.

Turkish law allows a creditor to seek interim protective measures (ihtiyati haciz - precautionary attachment) before or during the exequatur proceedings, to prevent the debtor from dissipating assets while the case is pending.

A precautionary attachment order can be obtained from the court on an ex parte basis if the creditor demonstrates a credible claim and a risk of asset dissipation. The creditor is typically required to post a security deposit, the level of which the court sets at its discretion. The attachment freezes specific assets - bank accounts, real property, receivables - pending the outcome of the main proceedings.

Under the Enforcement and Bankruptcy Law, a creditor holding a foreign arbitral award that has been filed for recognition may apply for precautionary attachment on the basis of the award itself, without waiting for the exequatur to be granted. This is a significant practical tool: it allows the creditor to secure assets at the outset, reducing the risk that a lengthy contested proceeding results in a hollow victory.

In practice, founders should consider applying for precautionary attachment simultaneously with or immediately after filing the exequatur petition, particularly where the debtor is a company with liquid assets that could be transferred or encumbered quickly. The application must identify specific assets with reasonable precision; a general request without asset identification is unlikely to succeed.

What happens if the VIAC award has been partially set aside at the seat in Vienna?

If an Austrian court has set aside part of the VIAC award, the Turkish court will take that into account under Article V(1)(e) of the New York Convention, which allows refusal of enforcement where the award has been set aside by a competent authority at the seat. However, a partial set-aside does not automatically block enforcement of the remaining, intact portion of the award. Turkish courts have discretion to enforce the parts of the award that remain valid. The creditor should present clear evidence of which parts of the award are unaffected by the set-aside decision and argue for partial enforcement. Counsel should also consider whether to seek a stay of the Turkish proceedings pending any ongoing set-aside proceedings in Austria, or whether to press forward with enforcement of the undisputed portions.

How long does it realistically take to receive payment after the exequatur is granted?

Obtaining the exequatur order is not the end of the process. After the order is issued, the creditor must initiate enforcement proceedings under the Enforcement and Bankruptcy Law, serve the enforcement notice on the debtor, and allow the debtor a short statutory period - typically seven days - to pay voluntarily. If the debtor does not pay, the creditor instructs enforcement officers to attach specific assets. Attachment of bank accounts can be relatively swift, often within days of the instruction. Attachment and sale of real property or business assets takes longer, potentially several months. In total, creditors should plan for three to nine months between the exequatur order and actual receipt of funds, depending on the debtor's asset profile and cooperation.

Can a VIAC award be enforced in Turkey if the underlying contract was governed by Austrian law?

Yes. The governing law of the underlying contract does not affect the enforceability of the award in Turkey. Turkish courts conducting an exequatur review do not re-examine the merits of the dispute or the correctness of the tribunal's application of Austrian law. The review is limited to the procedural and public policy grounds in Article V of the New York Convention and the two Turkish reservations. The fact that the tribunal applied Austrian substantive law is not a ground for refusal. What matters is that the arbitration agreement was valid, the proceedings were conducted properly, and the award does not violate Turkish public policy. A VIAC award applying Austrian law to a commercial dispute between an Austrian and a Turkish party is a standard enforcement scenario that Turkish courts handle routinely.

Enforcing a VIAC award in Turkey is a structured, achievable process for creditors who prepare their document package carefully, address Turkey's New York Convention reservations proactively, and engage experienced local counsel. The exequatur procedure under MÖHUK and the New York Convention provides a clear legal pathway, and Turkish courts have developed consistent practice on the Article V grounds. Contested cases take longer and require interim protective measures to secure assets, but the legal framework supports enforcement in the large majority of commercial disputes.

VLO Law Firm advises international clients on award enforcement in Turkey. We can assist with exequatur petitions, document preparation, precautionary attachment applications, and post-exequatur asset recovery. To request a consultation, contact: info@vlolawfirm.com