Validity of International Jurisdiction Clauses in Standard Terms and Conditions
under Turkish Law
Dr. Tugce Nimet Yasar / Biset Sena Gunes
Ankara Yildirim Beyazit University
Thursday, 12 September – 4:00 pm
Room W 201, Faculty of Law – Professor-Huber-Platz 2, 80539 Munich
Whilst the idea that parties to a dispute can designate the forum for their existing or future disputes dates back to the Roman law, jurisdiction agreements were refused in many jurisdictions for a long time on the grounds that jurisdiction of courts could only be established by the law based on the sovereignty of the states. Therefore, the change of jurisdiction of courts by the parties could have presented challenges to the public policy of the states. With the growth of international trade, however, the need to avoid jurisdiction problems in litigation has been increased. Thus, today, based on the party autonomy, i.e. ‘the most widely accepted private international rule of our time’, parties to a commercial transaction are allowed to choose the forum to resolve the disputes arising out of their transaction. This is also the case in the European Union and Turkey. Article 25 of the Brussels I (recast) Regulation guarantees the parties’ right to conclude an agreement as to jurisdiction and clarifies the conditions for the validity of such agreements. In Turkey, on the other hand, this issue is addressed under two different laws. First, Articles 17 and 18 of the Turkish Code of Civil Procedure, which are applicable for disputes involving foreign elements due to the general reference to domestic jurisdictional rules under Article 40 of the Turkish Private International Law Act (PILA) enable parties to grant jurisdiction to Turkish courts and lay down requirements for the validity of such clauses. Second, when parties to a commercial transaction intend to derogate from the jurisdiction of Turkish courts and give competence to a court or courts of a different state, they could draft an agreement in this regard pursuant to Article 47 of the Turkish Private International Law Act, subject to the conditions outlined there. Within the limits of these provisions, parties often include an international jurisdiction clause in their agreement for reasons of legal certainty and foreseeability. Such clauses are also of frequent use in standard terms and conditions which are attached either to the very text of the agreement concluded by the parties or to the bill of lading or the invoice issued in the course of the business relationship between the parties. The inclusion of jurisdiction clauses in standard terms and conditions, yet, may raise doubts on the validity of such clauses. The approach of the courts -even of the same jurisdiction- to this issue may be divergent.
Questions regarding the requirements for the validity of jurisdiction clauses were brought before the Court of Justice of the European Union (CJEU) twice in the past three years. In both disputes, although jurisdiction clauses were set out in the “general conditions of sale”, the Court decided differently in each considering whether these conditions were part of the invoices or the contract contained an “express reference to general conditions”. The issue has also been a matter of discussion before the Turkish Courts. Under Turkish law, standard terms and conditions are deemed invalid if, contrary to the principle of good faith, they are unreasonably disadvantageous to the adhering party or that may aggravate the adhering party’s position (Art. 25 of the Turkish Code of Obligations (TCO)). Turkish Courts may consider the provisions of the TCO on this issue as overriding mandatory rules, and therefore may declare jurisdiction clauses in standard terms and conditions invalid due to the fact that they are contrary to the principle of good faith. However, in a dispute between merchants, the Regional Court of Appeal of Istanbul ruled that the jurisdiction clause in the standard terms and conditions is valid, since the adhering party accepted all standard terms and conditions including that clause while acting prudently.
The cases stated above indicate divergent attitudes of the courts of different jurisdictions towards the issue which in some cases may vitiate the party autonomy. Hence, the aim of this paper is to examine the validity of such clauses from the Turkish perspective.