Public Policy Review of Arbitral Awards

Arbitration is designed to deliver a final and binding outcome based on party autonomy. Yet, no legal system enforces arbitral awards blindly. Courts must strike a balance between (i) protecting the finality and efficiency of arbitration and (ii) safeguarding the legal order’s fundamental values—due process, basic rights, and the prohibition of illegality. This balance is embodied in public policy review: an exceptional control mechanism allowing courts to refuse enforcement or set aside an award only when the award’s effects collide with core principles of the forum’s legal order.

This article explains public policy review in Turkey from two angles:

1. Set-aside (annulment) proceedings for awards seated in Turkey, and
2. Recognition/enforcement of foreign arbitral awards.

1) Where Does “Public Policy” Appear in the Legal Framework?

a) Set-aside (seat in Turkey)

For awards rendered with a Turkish seat, the primary court remedy is a set-aside action. Turkish law lists the annulment grounds exhaustively, and one of them is that the award is contrary to public policy.
In addition, courts consider arbitrability (whether the dispute can be resolved by arbitration) as a key filter; certain matters, such as rights in rem over immovable property, are not arbitrable.

b) Enforcement of foreign arbitral awards

Turkey’s rules on foreign arbitral awards explicitly include public policy as a refusal ground. If the award is contrary to “public order/public policy,” Turkish courts may refuse enforcement under the statutory framework.

c) The New York Convention standard

Internationally, the New York Convention (1958) is central. It permits refusal of recognition/enforcement if enforcement would be contrary to the public policy of the enforcing State.
Notably, the Convention’s wording frames refusal as discretionary (“may be refused”), reinforcing that public policy is an exception, not the rule.

2) What Is Public Policy—and Why Must It Be Narrow?

Legislation often avoids defining public policy because it is meant to protect the system’s most essential values, which can evolve. However, modern enforcement practice consistently treats public policy as a narrow, last-resort concept—especially for foreign awards.

Judicial guidance materials on the New York Convention underline that public policy is undefined, that an international public policy concept may apply, and that this international concept is generally narrower than domestic public policy. Many courts follow this narrower approach in practice.

3) The Core Limit: No Review on the Merits (No “Appeal in Disguise”)

Public policy review is not a license for courts to re-try the case. A foundational principle in international enforcement is no review on the merits: courts should not reassess facts, reweigh evidence, or correct alleged legal errors as if they were appellate tribunals.
The court’s question is therefore not “Was the tribunal right?” but “Would enforcing this award undermine the forum’s fundamental legal principles?”

This distinction matters in practice:

• Illegality or a severe due process breakdown can implicate public policy.
• Ordinary errors of law usually do not.

4) Typical Public Policy Triggers in Arbitration

A) Procedural public policy (fair hearing guarantees)

These issues relate to whether the arbitration respected basic fairness:

• Real denial of the right to be heard (lack of proper notice, inability to present the case),
• Serious inequality of arms,
• Extreme impartiality/independence concerns,
• Rarely, defects so severe that the process becomes fundamentally unfair.

Even here, the standard is high: minor procedural imperfections are generally insufficient unless they are serious and outcome-relevant.

B) Substantive public policy (the outcome’s clash with core norms)

These issues focus on the enforceability of the award’s effects:

• Enforcement would protect or reward clear illegality (e.g., bribery/corruption-related performance),
• Fraud-based relationships being effectively validated,
• Direct conflict with the forum’s most fundamental principles (constitutional essentials, basic morality, and core prohibitions).

The key is not to “re-apply” substantive law, but to prevent enforcement that would damage the legal order’s core.

5) Enforcement Strategy in Turkey: Aligning Domestic Rules and the Convention

In foreign award enforcement, Turkish courts apply the statutory refusal grounds, including public policy.
The New York Convention also recognizes public policy and arbitrability as grounds a court can raise ex officio because they protect public interests of the enforcing State.

Practical consequences:

• The applicant should present a clean procedural record (properly authenticated award, arbitration agreement, translations, etc.).
• The resisting party must articulate public policy concretely—what core principle is violated, how, and why enforcement would be intolerable—not merely argue that the award is “wrong.”

6) Practical Risk Controls: How to Reduce Public Policy Exposure

1. Draft a “defensible” arbitration clause: clear notice addresses, procedure, seat, language, and tribunal appointment mechanism.
2. Document due process: communications, hearing opportunities, equal timelines, and procedural orders matter later.
3. Ensure the award is well-reasoned and within scope: scope creep and lack of reasoning invite challenges disguised as public policy.
4. Check arbitrability early: if enforcement in Turkey is likely, arbitrability is a front-line issue.