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Arbitration agreements

What are the validity requirements for an arbitration agreement?

Under Article 4 of the International Arbitration Law and Article 412 of the Civil Procedural Code, an arbitration agreement may either be included in the main contract as an arbitration clause or be in the form of a separate agreement, regardless of whether the legal relationship between the parties is contractual in nature. The arbitration agreement must be made in writing and must be a written document signed by the parties or in the form of a letter, telegram, telex or fax exchanged between the parties or via an electronic medium, reflecting the parties’ agreement. Alternatively, if in its statement of defence the defendant does not object to the existence of an arbitration agreement referred to in the statement of claim, or where there is reference to a document containing an arbitration clause that is intended to constitute part of the main contract, a valid arbitration agreement will be considered to have been made. For an arbitration agreement to be valid, it must comply with the governing law; if there is no choice of law, it must comply with Turkish law. The Court of Appeals has established that the parties’ intention to resolve their dispute through arbitration must be clear and must leave no room for doubt. Finally, if an arbitration agreement is signed by a representative, he or she must have been granted special authority to sign an arbitration agreement or to bind his or her principal to arbitrate.

Enforcement of agreements
How are arbitration agreements enforced in your jurisdiction? What is the attitude of the national courts towards arbitration agreements?

Where a dispute subject to arbitration is brought before a Turkish court and the defendant objects to it being resolved by arbitration, it must submit a preliminary objection to this effect in its statement of defence. Under Turkish law, preliminary objections cannot be made after the statement of defence has been submitted. The court will examine any objection to arbitration as a preliminary matter and seek the parties’ clear intent by reviewing their arbitration agreement, if any. If the arbitration objection is accepted, the court will dismiss the case on procedural grounds.

Can an arbitral tribunal with its seat in your jurisdiction consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances?

The International Arbitration Law and the Civil Procedural Code are silent about the consolidation of separate arbitration procedures. If the arbitration rules referred to in the arbitration agreement govern consolidation, these would apply. Otherwise, a decision on consolidation would be at the discretion of the arbitral tribunal. Since there is no restriction on consolidation, the arbitral tribunal may determine this based on whether the disputes arise from the same arbitration agreement or same legal relationship, and whether the parties are the same.

Choice of law
How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?

According to Article 24 of the International Private Procedure Law, disputes arising from a contractual relationship are subject to the parties’ explicit choice of law. However, the choice of foreign governing law is valid for matters of private law involving a foreign element, so long as this is not contrary to public order. If the substantive law is unclear, the contract will be governed by the law with which it is most closely connected. This will be presumed to be the applicable law where the party who will perform the characteristic obligation under the contract has, at the time the contract is concluded, his or her habitual residence, or principal place of business for contracts concluded for commercial or professional activities. If the party who will perform the characteristic obligation under the contract has more than one place of business, the one which is more closely connected with the contract will apply. Considering all the circumstances of the case, the law which is more closely connected with the contract will be determined to apply.

Are there any provisions on the separability of arbitration agreements?

Under the International Arbitration Law and the Civil Procedural Code, arbitration agreements are accepted as distinct, independent agreements, separate from the underlying agreement, meaning that the validity of one agreement will not affect the other one.

Multiparty agreements
Are multiparty agreements recognised?

The International Arbitration Law and the Civil Procedural Code contain no specific provisions regarding multiparty arbitration agreements. For a multiparty arbitration agreement to be valid, it must fulfil the conditions set out in the International Arbitration Law and the Civil Procedural Code which apply to all arbitration agreements.

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