An arbitration agreement is an agreement by the parties to refer all or part of the disputes which have arisen, or which may arise between them in respect of a defined legal relationship to a sole arbitrator or an arbitral tribunal.
The laws that may be applicable to the validity of an arbitration agreement under the Turkish legal system may be listed as follows: Code of Civil Procedure No. 6100 (“CCP”), International Arbitration Law No. 4686 (“IAA”), and the Law on Ratification of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards No. 3731.
Article 408 of CCP titled “Arbitrability” and Article 412 titled “Definition and form of the arbitration agreement” shall be applicable where the seat of arbitration is Türkiye and where the dispute has no foreign element; Article 4 titled “Definition and Form” of chapter two of the IAA titled “Arbitration Agreement” shall be applicable where a dispute has a foreign element and the seat of arbitration is determined to be in Türkiye or where the provisions of the IAA have been chosen as the governing law by the parties, the sole arbitrator or arbitral tribunal; Article II of the New York Convention ratified by Law No. 3731 shall be applicable for disputes concerning the recognition and enforcement of foreign arbitral awards.
The aforementioned provisions determine the specific conditions of the validity of an arbitration agreement, with almost identical sentences. Accordingly, in order for an arbitration agreement to be valid, some specific conditions shall be met: (i) the mutual intention to arbitrate, (ii) the written form, (iii) the arbitrability, and (iv) the specific or identifiable dispute.
Firstly, the mutual intention of the parties to arbitrate in the arbitration agreement must be crystal clear, leaving no doubt. That is to say, the wording of the arbitration agreement shall be precise and unambiguous. Otherwise, for example, an arbitration agreement that authorizes both the arbitrators and the courts to resolve the dispute shall be invalid. In practice, such a clause is defined as a “pathological arbitration clause”. In another example where it is agreed that only one of the parties may refer the dispute to arbitration, the arbitration agreement shall also be deemed invalid. These lasts are known as “asymmetric arbitration clauses”.
Secondly, the arbitration agreement shall be in writing. According to the aforementioned provisions, “an agreement is in writing if it is contained in a document signed by the parties or in an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement, or in an exchange of statements of claim and defense in which the existence of an agreement is alleged by one party and not denied by another. The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement provided that the reference is such as to make that clause part of the contract.”
Thirdly, the subject matter of the arbitration agreement shall be capable of being settled by arbitration. In other words, it shall be related to the matters that the parties can freely dispose of. In this respect, arbitration agreements on administrative and criminal issues, where the state does not share its jurisdiction with individuals, are invalid. In addition, it is not possible for the parties to conclude an arbitration agreement regarding some private law disputes (e.g., disputes related to public order such as the title deeds of immovable property).
Fourthly, another specific condition in terms of the subject matter of the arbitration agreement is that the subject matter of the agreement shall be specific or identifiable. At this point, it should be emphasized that all disputes that may arise in the future regarding an existing contract are deemed identifiable. On the other hand, it can be said that a general arbitration agreement to resolve all the disputes between the parties that may arise out of a legal relationship that does not currently exist cannot be concluded.
Last but not least, in addition to the above-mentioned specific conditions of the validity of an arbitration agreement, the agreement shall also meet the general conditions of the validity of an agreement under the law of obligations.
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