Resolution of liability claims against members of board of directors of joint-stock companies through arbitration

Members of the board of directors of a joint-stock company are required to act in accordance with their certain obligations arising from the law and the articles of association when performing their representation and management activities. Otherwise, they may be held legally liable for failing to fulfill their obligations arising from articles of association and the law. When the legal liability of board members is at issue, the dispute is resolved through state courts pursuant to Article 561 of Turkish Commercial Code. However, as it is known, disputes can also be resolved through arbitration, an alternative and voluntary dispute resolution mechanism, instead of state courts. The purpose of this study is to examine resolution of liability claims brought against members of board of directors of joint-stock companies through arbitration and to address the prominent issues that arise when liability claims against members of the board of directors are brought before arbitration.