The 11th Civil Law Chamber of the Turkish Court of Appeal has recently ruled that jurisdiction clauses which provide that disputes between Turkish and foreign counterparties are to be submitted to the English Courts or the Courts of England are invalid. In order for a jurisdiction clause to be valid and enforceable, the name of the English court must be set out.
This judgment is likely to have a wider application, to jurisdiction clauses favouring courts in other jurisdictions, as well as in England.
The decision is based upon Article 47 of the Turkish Act on International Private Law and Procedural Law and Articles 17 and 18 of the Turkish Civil Procedure Code. Article 47 provides that where the jurisdiction of a Turkish court is not determined according to exclusive jurisdiction principles, the parties’ choice of jurisdiction of a foreign court in a dispute which contains a foreign element shall be binding as a matter of Turkish law, providing the contract is concluded in writing and the dispute contains a foreign element. Articles 17 and 18 require the name of the foreign court to be stipulated. According to these Articles, the reference to a foreign court must be “precise”. The Turkish Court of Appeal found that reference to the English Courts or the Courts of England is not sufficiently precise to satisfy the requirements of Articles 17 and 18.
When contracting with Turkish counterparties, non-Turkish entities who wish disputes to be submitted to the jurisdiction of non-Turkish courts will need to specify the name of the court they wish to hear the dispute, in order for it to be enforceable as a matter of Turkish law.