Alternative dispute resolution methods, which offer a less costly and faster way to resolve disputes, have become increasingly common in recent times and have gained even more importance today. Arbitration, which is at the forefront of these resolution methods, has become more widespread and reliable through bilateral and multilateral agreements internationally. Indeed, what makes Arbitration attractive and the reasons why Arbitration proceedings are preferred to a great extent today are the advantages of freedom of will, expertise, speed, confidentiality and procedural flexibility that Arbitration offers to the parties. In Turkish Law, while the resolution of international commercial disputes through arbitration is a widespread practice, there is not yet a consensus or established jurisprudence regarding the resolution of disputes based on corporate law through arbitration.
According to the Code of Civil Procedure ("HMK") and the International Arbitration Law ("MTK"), the types of disputes that are not arbitrable are determined as "disputes related to immovable property" and "disputes not subject to the will of the parties." It is understood that disputes other than those mentioned above are arbitrable. In this context, the principle is that disputes are arbitrable, and non-arbitrability is considered an exception. Although it is generally accepted that disputes based on corporate law can be resolved through arbitration, different interpretations and jurisprudence on this issue are discussed below.
The arbitrability of disputes based on corporate law can be examined in two separate groups: disputes arising on a corporate level, such as the annulment of general assembly resolutions, or the dissolution of the company; and disputes arising within the scope of contracts.
Corporate disputes are defined as disputes related to the structure and functioning of the company. The arbitrability of disputes occurring on a corporate level, such as the annulment of general assembly resolutions or the dissolution of the company, is a contentious issue in the doctrine. One view argues that these disputes are arbitrable because there is no legal provision in the legislation stating that they are not arbitrable and because they are subject to the parties' will. However, another view opposes this by arguing that these disputes cannot be subject to arbitration since they cannot be settled amicably, do not meet the condition of being subject to the parties' will, and the outcome of the case may also affect non-parties. Below, corporate disputes are examined separately under several headings.
Annulment of General Assembly Resolutions:
In practice, the Supreme Court has held that lawsuits concerning the annulment of general assembly resolutions are not arbitrable. The Court has explained in one of its decisions that arbitration is subject to the will of the parties, and since it is not possible to resolve a lawsuit for the annulment of general assembly resolutions by mutual agreement between the parties, such lawsuits are not arbitrable (See Yargıtay 11th Civil Chamber, Case No. 2011/13485, Decision No. 2012/19915, Date: 12.04.2012, and Yargıtay 11th Civil Chamber, Case No. 2019/2226, Decision No. 2019/5000, Date: 01.07.2019).
In the doctrine, there are multiple views regarding the arbitrability of lawsuits concerning the annulment of general assembly resolutions. One view argues that the annulment of general assembly resolutions is not arbitrable because it is not subject to the parties' will, as stated in the aforementioned the Supreme Court ruling. Another view contends that an assessment of arbitrability should be made by distinguishing according to the subject matter of the general assembly resolution. The essential criterion in this distinction is whether the subject matter of the general assembly resolution is subject to the parties' will. In addition to these views, another opinion argues that lawsuits for the annulment of general assembly resolutions are arbitrable, asserting that there is no mandatory regulation preventing the resolution of such lawsuits through arbitration, and thus, there is no situation that would impede the application of arbitration in this regard.
Dissolution of the Company:
The Supreme Court accepts that lawsuits concerning the dissolution of a company are not arbitrable, as the issue of dissolution is not subject to the will of the parties (See Yargıtay 11th Civil Chamber, Case No. 2014/141, Decision No. 2014/6951, Date: 09.04.2014). However, if the dissolution and liquidation of the company are decided by the shareholders, it can be said that the lawsuit for dissolution and liquidation would be arbitrable. On the other hand, opposing views argue that the issue of dissolution and liquidation, which entails the termination of the legal entity, also has aspects related to public order, which cannot be ignored, and therefore, such disputes are not arbitrable.
Liability of Board Members:
Disputes regarding the liability of board members, whether related to direct damages suffered by the company or indirect damages suffered by shareholders, are considered arbitrable disputes.
Registrability of Arbitral Awards in the Trade Registry:
The view of the Regional Court of Appeal is that arbitral awards can be registered just like court decisions. They assert that it is not appropriate to argue that disputes related to corporate law are not arbitrable on the grounds that they require changes in the registry (See Istanbul Regional Court of Appeal 14th Civil Chamber, Decision dated 20.10.2022, Decision No. 2022/1373).
There is a consensus that contractual disputes, which do not fall within the corporate framework, are arbitrable. In addition to shareholder agreements, matters such as the exercise of option rights and voting agreements are also considered arbitrable. Indeed, these matters are regulated within the framework of freedom of contract and are subject to the will of both parties. Therefore, they can be resolved through arbitration.
Furthermore, in the aforementioned judgment, the Regional Court of Appeal does not require the arbitration clause to be included in the articles of association of the company, and adopts that an arbitration clause in the shareholders' agreement is sufficient for arbitrability. Indeed, the Regional Court of Appeal is of the opinion that as long as the arbitration clause is given the character of a substantive provision of the articles of association, it has binding effect.
As a result, it should be accepted that the main rule is arbitrability, and non-arbitrability is an exception. Considering that recourse to arbitration is a right, it is appropriate for this exception that limits the right to be interpreted narrowly. In this context, in disputes related to corporate law, it is essential to first determine whether the issue is corporate or contractual in nature. If it is determined to have the nature of a corporate dispute, it is appropriate to assess whether the matter is subject to the will of the parties, whether it is related to public order, and whether it has any implications for third parties.
*While the Supreme Court does not consider disputes regarding the annulment of general assembly resolutions and the dissolution of the company as arbitrable, there are opinions in the doctrine that argue otherwise.* However, it can be said that there is a consensus that contractual disputes between shareholders are arbitrable
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