Public Policy as a Ground for Refusal of Enforcement in Turkey: Turkish Law and the New York Convention

Introduction

The enforceability of an arbitral award is one of the principal reasons commercial parties choose arbitration. A successful claimant may seek to enforce an award against bank accounts, company shares, commercial receivables, movable property, real estate or other assets owned by the award debtor in Türkiye.

Foreign arbitral awards are generally recognised and enforced in Türkiye under the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards or, where the Convention does not apply, under the Turkish International Private and Procedural Law No. 5718, commonly known as MÖHUK.

Both legal frameworks establish a limited number of grounds on which recognition or enforcement may be refused. One of the most important—and most frequently invoked—is public policy.

Article V(2)(b) of the New York Convention permits the competent court to refuse recognition or enforcement where doing so would be contrary to the public policy of the enforcement country. Article 62(1)(b) of MÖHUK similarly provides that a Turkish court shall refuse enforcement where the arbitral award is contrary to public morality or public policy.

Public policy is nevertheless an exceptional defence. It is not intended to provide the unsuccessful party with a second opportunity to argue the merits of the commercial dispute. Turkish enforcement courts should not reconsider the tribunal’s interpretation of the contract, reassess evidence or determine whether the arbitrators applied the governing law correctly.

The central question is not whether the award differs from the result that a Turkish court might have reached. The relevant question is whether recognising or enforcing the award would create a manifest and intolerable conflict with the fundamental principles of the Turkish legal order.

This comprehensive guide examines public policy as a ground for refusal of enforcement in Turkey, including the applicable legal provisions, the distinction between domestic and international public policy, the prohibition against reviewing the merits, procedural and substantive public policy, burden of proof and practical enforcement strategy.

What Is Public Policy under Turkish Law?

Public policy is an open and flexible legal concept intended to protect the fundamental legal, constitutional, moral and economic values of a legal system.

It cannot be defined through a closed list that applies identically to every dispute. Its content may depend on:

• The nature of the dispute;
• The legal relationship between the parties;
• The consequences of enforcement;
• Fundamental constitutional protections;
• The right to a fair hearing;
• Mandatory principles of exceptional importance;
• Generally accepted standards of morality and justice;
• The international character of the dispute.

Not every mandatory rule forms part of public policy. A Turkish statutory provision may be mandatory in domestic litigation without being sufficiently fundamental to prevent enforcement of a foreign arbitral award.

Turkish judicial practice distinguishes the public policy applicable in international private law from the broader concept of domestic public policy. The international public policy standard is narrower, and intervention should remain limited and exceptional.

This restrictive interpretation reflects the commercial purpose of international arbitration. If every difference between foreign law and Turkish law were treated as a public-policy violation, foreign arbitral awards could rarely be enforced and the New York Convention’s enforcement-oriented structure would lose practical value.

Legal Basis under the New York Convention

Article III of the New York Convention requires contracting states to recognise qualifying arbitral awards as binding and enforce them under local procedural rules, without imposing substantially more onerous conditions than those applicable to domestic awards.

Article V contains the limited grounds for refusing recognition and enforcement.

The grounds in Article V(1) may generally be invoked and proved by the party resisting enforcement. They concern matters such as:

• Incapacity;
• Invalidity of the arbitration agreement;
• Lack of proper notice;
• Inability to present a case;
• Excess of jurisdiction;
• Irregular tribunal constitution;
• An award that is not binding or has been set aside.

Article V(2) contains two additional matters that the enforcement court may examine:

1. Whether the dispute is capable of settlement by arbitration under the law of the enforcement country;
2. Whether recognition or enforcement would be contrary to that country’s public policy.

The wording is significant. The Convention does not ask whether every provision, factual finding or legal statement in the award is compatible with the enforcement country’s law. It asks whether the recognition or enforcement of the award would be contrary to public policy.

The examination should therefore focus principally on the legal consequences that enforcement would create in Türkiye.

Public Policy under MÖHUK Article 62

Articles 60 to 63 of MÖHUK regulate the enforcement and recognition of foreign arbitral awards where the domestic statutory framework applies.

Article 60 provides that foreign arbitral awards that are final, enforceable or binding on the parties may be enforced. Article 61 identifies the principal documents that must accompany the application, including the arbitration agreement, the award and duly certified Turkish translations.

Article 62 lists the grounds for refusing enforcement. Under Article 62(1)(b), enforcement must be refused where the award is contrary to public morality or public policy. Article 63 provides that recognition of foreign arbitral awards is also subject to the rules governing enforcement.

Accordingly, public policy may be relevant both where a party seeks:

• Compulsory enforcement of a monetary or non-monetary award;
• Recognition of the award as final or binding;
• Reliance on the award as res judicata;
• Use of the award in related Turkish proceedings.

Although the wording of MÖHUK refers to the award being contrary to public policy, Turkish judicial analysis generally focuses on whether the legal effect produced by recognition or enforcement would violate fundamental Turkish principles.

Treaty Rules and Domestic Enforcement Law

MÖHUK expressly preserves the application of international treaties to which Türkiye is a party. Therefore, where the New York Convention applies, its provisions take priority within their scope.

The award creditor should determine at the beginning of the case:

• The legal seat of the arbitration;
• The country in which the award was rendered;
• Whether the New York Convention applies;
• Whether Türkiye’s treaty declarations are relevant;
• Whether MÖHUK provides an alternative or more favourable basis;
• Whether another bilateral or multilateral treaty applies.

The applicable framework can affect document requirements, burden of proof and the way objections are formulated. Nevertheless, both the New York Convention and MÖHUK recognise public policy as an exceptional enforcement defence.

International Public Policy Is Narrower than Domestic Public Policy

The distinction between domestic public policy and international public policy is fundamental.

Domestic public policy may include mandatory rules governing relationships entirely connected with Türkiye. International public policy is concerned only with principles considered so essential that the Turkish legal order cannot tolerate the result of recognising or enforcing the foreign decision.

Therefore, an arbitral award does not become contrary to Turkish public policy merely because:

• The tribunal applied foreign law;
• The foreign law differs from Turkish law;
• A Turkish court would have interpreted the contract differently;
• A Turkish mandatory provision was not applied;
• The damages calculation differs from Turkish judicial practice;
• The unsuccessful party considers the award unfair;
• The award contains an ordinary error of law or fact.

Official Turkish judicial materials describe public-policy intervention in international private law as limited and exceptional. They also emphasise that the international public-policy concept is narrower than the public-policy concept applied in purely domestic legal relationships.

The award debtor must therefore identify more than an ordinary inconsistency with Turkish law. The objection should demonstrate a conflict with a fundamental principle whose violation would make enforcement intolerable within the Turkish legal order.

Public Policy Is Not an Appeal on the Merits

Turkish courts conducting enforcement proceedings are not appellate courts for the arbitral tribunal.

They should not reconsider:

• Whether the tribunal correctly interpreted the contract;
• Whether a contractual breach occurred;
• Which witness was credible;
• Whether an expert report was persuasive;
• Whether damages were calculated correctly;
• Whether the tribunal selected the best legal interpretation;
• Whether the evidence should have been given a different weight.

This prohibition is frequently described as the prohibition of révision au fond, meaning that the court cannot conduct a substantive review of the award.

The distinction is especially important in public-policy cases because an award debtor may attempt to repackage an ordinary merits complaint as a public-policy objection.

For example, a party may argue that the tribunal:

• Misunderstood Turkish commercial law;
• Applied the wrong interest rule;
• Calculated lost profits incorrectly;
• Misinterpreted the termination clause;
• Failed to accept a particular defence.

These complaints generally concern the merits. They do not become public-policy issues merely because the objecting party describes the alleged error as serious.

Turkish judicial reasoning on foreign arbitral awards emphasises that the court should examine the legal consequences of recognition or enforcement, not whether the law applied to the merits was correctly selected or interpreted.

The Difference between Incorrect Application of Law and Public Policy

An arbitral tribunal may commit an error without producing a public-policy violation.

The following distinction is useful:

Ordinary legal error

An ordinary legal error concerns whether the tribunal correctly applied the substantive law governing the dispute.

Examples may include:

• Incorrect interpretation of a statutory limitation period;
• Disagreement over contractual penalties;
• An arguable error in calculating interest;
• A debatable interpretation of company law;
• Incorrect classification of a contractual obligation.

Such errors are normally outside the enforcement court’s review.

Public-policy violation

A public-policy violation concerns whether enforcement would undermine a fundamental principle of the Turkish legal order.

Potential examples may include:

• Enforcement of an obligation requiring criminal conduct;
• An award obtained through corruption;
• A serious denial of the right to be heard;
• Enforcement of a claim based on forged evidence where the integrity of the award has been decisively compromised;
• A result fundamentally incompatible with constitutional rights;
• Enforcement producing irreconcilable conflict with a final Turkish judgment in circumstances affecting legal certainty.

The boundary must be applied strictly. Otherwise, every alleged error could be transformed into a public-policy defence.

Procedural Public Policy

Public policy may protect fundamental procedural standards as well as substantive legal values.

Procedural public policy may become relevant where the arbitration involved a serious violation of:

• Equality of the parties;
• The right to be heard;
• The right to present evidence;
• Tribunal independence and impartiality;
• Fundamental due-process guarantees;
• Procedural good faith;
• The prohibition against fraud or corruption.

However, the New York Convention and MÖHUK already contain specific refusal grounds concerning lack of notice and inability to present a case. Under Article V(1)(b) of the Convention, enforcement may be refused where the party resisting enforcement was not given proper notice or was otherwise unable to present its case. MÖHUK Article 62 similarly addresses lack of notice concerning the arbitrator’s appointment and deprivation of the opportunity to make claims or defences.

A party should therefore identify the most precise legal ground rather than relying automatically on public policy.

The right to be heard

A serious and material denial of the right to be heard may justify refusal.

Possible examples include:

• Failure to notify a party of the arbitration;
• Failure to communicate a decisive submission;
• Reliance on evidence concealed from one party;
• Refusal to provide any meaningful opportunity to respond;
• Determination of the case on a decisive issue that the parties were prevented from addressing.

The right to be heard does not require acceptance of every procedural request.

An arbitral tribunal may:

• Reject irrelevant evidence;
• Limit repetitive submissions;
• Enforce procedural deadlines;
• Refuse unnecessary witnesses;
• Limit document production;
• Conduct a documents-only procedure where legally permitted.

The relevant question is whether the proceedings, viewed as a whole, provided a fair and reasonable opportunity to present the case.

Substantive Public Policy

Substantive public policy concerns the content and legal consequences of the relief granted.

A Turkish court may examine whether enforcement would give legal effect to an outcome fundamentally inconsistent with Turkish constitutional, moral or economic principles.

Potential areas of concern may include:

• Corruption and bribery;
• Money laundering;
• Fraud;
• Criminal agreements;
• Serious competition-law violations;
• Fundamental property protections;
• Prohibition of discriminatory or unlawful obligations;
• Mandatory rules protecting the integrity of the judicial and enforcement systems.

The existence of a Turkish mandatory rule is not sufficient by itself. The rule must protect a value of such fundamental importance that enforcement of the contrary result cannot be tolerated.

For example, a contractual provision may be unenforceable under a Turkish domestic rule, but the resulting foreign award may still be enforceable if the conflict does not reach the level of international public policy.

Public Morality and Illegal Contracts

MÖHUK Article 62(1)(b) refers expressly to both public morality and public policy.

An award may raise serious enforcement concerns where it requires payment or performance directly connected with:

• Bribery;
• Trafficking;
• Money laundering;
• Fraudulent transactions;
• Illegal commissions;
• Contracts requiring conduct prohibited by criminal law;
• Agreements fundamentally contrary to accepted standards of morality.

The court should nevertheless distinguish between:

1. A proven illegal transaction forming the legal basis of the award;
2. A mere allegation of illegality made by the losing party after the award.

The award debtor should not be permitted to reopen the merits by repeating allegations that were fully considered and rejected during arbitration, unless reliable evidence demonstrates that enforcement itself would legitimise serious illegality.

Corruption and Fraud

Corruption is generally capable of raising fundamental public-policy concerns.

An award enforcing an obligation to pay a bribe or compensate a party for the loss of an illegal corruption arrangement would be difficult to reconcile with Turkish public policy.

Fraud affecting the arbitration may also become relevant, particularly where:

• Evidence was forged;
• A material fact was deliberately concealed;
• Witness testimony was fabricated;
• The award was obtained through procedural deception;
• The tribunal or another participant was corrupted.

The party raising the objection should provide concrete and persuasive evidence. General suspicion or repetition of allegations rejected by the tribunal should not automatically prevent enforcement.

The enforcement court must balance two principles:

• Protection of the Turkish legal order against corruption and fraud;
• Respect for the finality of the arbitral tribunal’s factual findings.

Conflict with a Final Turkish Judgment

A foreign arbitral award may raise public-policy concerns where its enforcement would create an irreconcilable conflict with a final Turkish court judgment concerning the same legal relationship.

Such a conflict may threaten:

• Legal certainty;
• Consistency of the judicial system;
• Res judicata;
• Finality of judgments;
• Protection against contradictory enforcement obligations.

Turkish judicial analysis has acknowledged that contradiction with a final Turkish judgment may, depending on the circumstances, fall within public-policy review. However, the existence of different factual or legal conclusions does not automatically establish a violation.

In a significant judicial assessment involving foreign arbitral awards and Turkish criminal proceedings, the court stressed that a different result in the arbitral award and a Turkish criminal judgment does not necessarily mean the two decisions are legally incompatible. The reasons and legal standards applied in each proceeding must be examined.

For example, a criminal acquittal based on lack of proof beyond reasonable doubt does not necessarily prevent a civil or commercial tribunal from reaching a different conclusion under a lower standard of proof.

The court should therefore analyse whether the decisions are genuinely irreconcilable, rather than treating every difference as a public-policy violation.

Mandatory Turkish Law and Public Policy

One of the most common objections is that the arbitral tribunal failed to apply a mandatory Turkish rule.

This argument requires careful distinction.

Mandatory rules are provisions from which parties cannot depart in a domestic relationship. Public-policy rules protect the fundamental structure and values of the legal system.

The two categories overlap in some cases but are not identical.

Therefore:

• Violation of every mandatory provision does not automatically violate public policy;
• Application of foreign law is not itself contrary to Turkish public policy;
• Failure to reach the result that Turkish law would produce is not sufficient;
• The consequences of enforcement must be manifestly incompatible with a fundamental Turkish principle.

The restrictive international public-policy approach would be undermined if every Turkish mandatory rule became an independent ground for refusing foreign awards.

Interest, Contractual Penalties and Damages

Foreign arbitral awards may grant:

• Contractual interest;
• Compound interest;
• Default interest;
• Liquidated damages;
• Contractual penalties;
• Lost profits;
• Valuation-based compensation;
• Damages unavailable or calculated differently under Turkish law.

A difference between the award and Turkish substantive law does not automatically justify refusal.

The court should not recalculate damages or substitute Turkish interest rules merely because Turkish law would produce a lower amount.

A public-policy issue may arise only where the result is so extreme or legally unacceptable that enforcement would conflict with fundamental principles rather than ordinary commercial rules.

The objection should therefore explain why the specific result violates a fundamental value. Merely asserting that the amount is high, commercially burdensome or different from Turkish practice is insufficient.

Punitive and Exemplary Damages

Some foreign legal systems permit punitive or exemplary damages intended to punish and deter rather than compensate.

Turkish private law is predominantly compensatory. Nevertheless, the existence of a punitive component should not automatically result in complete refusal without examining:

• The legal basis of the damages;
• The connection between the amount and the proven conduct;
• Whether the award separates compensatory and punitive components;
• The proportionality of the result;
• Whether partial enforcement is possible;
• The actual effect of enforcement in Türkiye.

Where only a separable portion is considered incompatible with public policy, the court should consider whether the remaining part can be recognised or enforced.

Public Policy and Non-Arbitrability Are Separate Grounds

Public policy should be distinguished from arbitrability.

Article V(2)(a) of the New York Convention permits refusal where the dispute is not capable of settlement by arbitration under the law of the enforcement state. Article V(2)(b) separately regulates public policy. MÖHUK Article 62 also lists non-arbitrability and public policy as separate refusal grounds.

The distinction matters because a dispute may be:

• Arbitrable but produce a public-policy problem;
• Non-arbitrable even though the award’s substantive result is not otherwise offensive;
• Both non-arbitrable and contrary to public policy;
• Neither.

For example, a contractual payment dispute connected with real estate may be arbitrable, while a direct determination of a right in rem over Turkish immovable property may fall outside arbitration.

The court should identify the correct legal ground rather than merging every mandatory or jurisdictional issue into public policy.

Can the Turkish Court Examine Public Policy on Its Own Motion?

Under Article V(2) of the New York Convention, public policy is a matter the enforcement court may examine on its own initiative.

The structure of MÖHUK Article 62 leads to a similar result. Article 62(2) expressly places the burden of proving certain listed objections on the party resisting enforcement but does not include public policy or arbitrability within that burden allocation. This structure indicates that the court may consider those matters independently.

The respondent should nevertheless raise the objection expressly and submit supporting evidence where it relies on public policy.

A court’s authority to act ex officio does not mean it must conduct an unlimited investigation into the entire arbitral record. The public-policy issue should normally be apparent from:

• The operative part of the award;
• The award’s legal consequences;
• Undisputed facts;
• Reliable evidence placed before the court;
• Fundamental procedural deficiencies.

Burden and Standard of Proof

Although the court may consider public policy ex officio, a party relying on factual allegations should prove those allegations.

For example, a respondent alleging that the award was obtained through corruption should identify and substantiate:

• The corrupt act;
• The persons involved;
• The connection with the award;
• Relevant criminal or regulatory findings;
• Documentary or testimonial evidence;
• Why the issue could not reasonably have been addressed earlier.

Vague allegations are insufficient.

The public-policy defence should be supported by clear, concrete and legally relevant facts because it seeks an exceptional departure from the general principle of enforcement.

Partial Enforcement

Public policy does not necessarily require refusal of the entire award.

An award may contain several separable rulings concerning:

• Principal debt;
• Interest;
• Contractual penalties;
• Costs;
• Counterclaims;
• Declaratory relief;
• Non-monetary obligations.

If only one separable part creates a public-policy problem, the court should consider whether the remaining portions can be recognised or enforced.

The New York Convention expressly permits partial enforcement where decisions within the scope of arbitration can be separated from those outside it. Although that provision directly concerns excess of jurisdiction, the principle of preserving enforceable portions is also relevant to a proportionate public-policy analysis.

Complete refusal should not be preferred where the objection can be resolved through legally workable partial enforcement.

Public Policy and Confidentiality

Arbitration proceedings are generally private, but enforcement proceedings take place before national courts.

The award creditor may need to submit:

• The arbitral award;
• The arbitration agreement;
• Certified translations;
• Procedural materials relevant to objections;
• Evidence concerning notification and binding status.

Where the award contains trade secrets, personal data or commercially sensitive information, the parties may request proportionate protection under Turkish procedural law.

Confidentiality should not, however, be used to prevent the court from examining a genuine public-policy defence. The court must have access to the documents necessary to evaluate whether enforcement would violate fundamental Turkish principles.

Practical Strategy for Award Creditors

An award creditor seeking enforcement in Türkiye should anticipate possible public-policy objections before filing.

The creditor should:

1. Classify the award correctly as foreign or Turkey-seated;
2. Determine whether the New York Convention or MÖHUK applies;
3. Review the operative provisions for potential Turkish-law concerns;
4. Obtain complete and accurate Turkish translations;
5. Analyse whether the award concerns arbitrable rights;
6. Prepare a response to due-process allegations;
7. Identify whether criminal, regulatory or Turkish court proceedings exist;
8. Distinguish merits issues from genuine public-policy matters;
9. Investigate the debtor’s assets;
10. Consider whether partial enforcement should be requested as an alternative.

The enforcement petition should emphasise:

• The final and binding nature of the award;
• Validity of the arbitration agreement;
• Proper notice and participation;
• The limited nature of public-policy review;
• The prohibition against reviewing the merits;
• The enforcement-oriented purpose of the New York Convention.

Practical Strategy for Award Debtors

A party resisting enforcement should avoid presenting every disagreement as a public-policy objection.

A credible objection should:

• Identify the fundamental Turkish principle involved;
• Explain precisely how enforcement would violate that principle;
• Demonstrate that the issue is not merely an error of law or fact;
• Provide reliable evidence;
• Address why the objection was not waived or previously resolved;
• Explain whether the alleged defect affects all or only part of the award;
• Distinguish public policy from other refusal grounds.

A weak objection may simply repeat the arbitration defence and ask the Turkish court to reconsider the evidence. Such an approach is inconsistent with the limited nature of enforcement proceedings.

Commonly Unsuccessful Public-Policy Arguments

The following arguments should not normally be sufficient on their own:

• The arbitrators interpreted the contract incorrectly;
• The tribunal preferred the opposing expert;
• The damages are high;
• The governing foreign law differs from Turkish law;
• A Turkish mandatory provision was not applied;
• The tribunal rejected a witness;
• The tribunal limited document production;
• The award contains an ordinary legal error;
• The losing party considers the result commercially unfair;
• A Turkish court might have reached a different result.

The respondent must establish a conflict with a fundamental principle rather than mere disagreement.

Frequently Asked Questions

What is public policy in the enforcement of arbitral awards?

Public policy refers to fundamental constitutional, legal, moral and procedural principles of the Turkish legal order. Enforcement may be refused where its result would create a manifest and intolerable conflict with those principles.

Which provisions regulate public policy in Türkiye?

The principal provisions are Article V(2)(b) of the New York Convention and Article 62(1)(b) of MÖHUK.

Can the court review the merits of the arbitral award?

No. The Turkish court should not reassess evidence, reinterpret the contract or determine whether the tribunal applied substantive law correctly.

Does every violation of mandatory Turkish law violate public policy?

No. International public policy is narrower than domestic mandatory law. The violation must affect a fundamental principle of the Turkish legal order.

Can a high damages award be refused?

A high amount alone is not sufficient. The objecting party must establish that enforcement of the specific award would violate a fundamental Turkish principle.

Can lack of notice constitute a public-policy violation?

A serious lack of notice may affect due process, but it is also regulated specifically under Article V(1)(b) of the New York Convention and MÖHUK Article 62.

Can corruption prevent enforcement?

Yes, where reliable evidence establishes that enforcing the award would legitimise corruption or that corruption seriously compromised the arbitral process.

Does conflict with a Turkish judgment always prevent enforcement?

No. The court must examine whether the decisions are genuinely irreconcilable and whether enforcement would undermine legal certainty. Different outcomes reached under different legal standards do not automatically create a public-policy violation.

Can the court raise public policy without an objection?

Yes. Article V(2) permits ex officio examination, and the structure of MÖHUK Article 62 similarly supports judicial examination of public policy and arbitrability.

Can only part of an award be enforced?

Yes. Where the problematic and enforceable portions can be separated, partial enforcement may be appropriate.

Conclusion

Public policy as a ground for refusal of enforcement in Turkey is an essential but exceptional safeguard.

Article V(2)(b) of the New York Convention allows Turkish courts to refuse recognition or enforcement where the resulting legal effect would be contrary to Turkish public policy. MÖHUK Article 62(1)(b) similarly provides for refusal where the foreign arbitral award is contrary to public morality or public policy.

The public-policy standard applicable to international arbitration is narrower than the public-policy concept used in purely domestic relationships. Not every mandatory Turkish rule, legal difference or alleged error is sufficient.

Turkish courts should not use public policy to reconsider:

• Contract interpretation;
• Evidence;
• Witness credibility;
• Damages;
• Ordinary legal errors;
• The tribunal’s selection or application of substantive law.

The correct examination focuses on whether enforcement would create a manifest conflict with fundamental Turkish principles.

Potential public-policy concerns may include:

• Serious denial of procedural fairness;
• Corruption;
• Fraud affecting the integrity of the proceedings;
• Enforcement of criminal or immoral obligations;
• Fundamental constitutional violations;
• Irreconcilable conflict with final Turkish judgments;
• Results that the Turkish legal system cannot reasonably tolerate.

The objection must remain proportionate. Where only a separable part of the award creates a problem, partial enforcement should be considered rather than automatic rejection of the entire award.

For award creditors, successful enforcement requires careful document preparation, accurate translation, classification of the applicable legal regime and early analysis of potential public-policy objections.

For award debtors, a persuasive defence must identify a genuine fundamental principle rather than rearguing the merits.

Specialised Turkish arbitration counsel can assist with recognition and enforcement applications, public-policy objections, asset-preservation measures and the subsequent compulsory enforcement of arbitral awards in Türkiye.