16.06.2023

Authors: Görkem Çetin, Mehmet Fatih Zorlu

In a contractual obligation relationship, the parties may agree to the application of the laws of a particular country. As a matter of fact, this freedom has been granted to the parties pursuant to the explicit provision in Article 47 of the Law on International Private and Procedural Law  (IPPL) No. 5718. In this context, the parties may authorise a foreign court in the dispute that the Turkish Courts shall have jurisdiction, or may authorise the Turkish courts, even if it has no jurisdiction. It should be noted here that this result fulfills the validity requirements for its occurrence.

      1. Authorisation of Foreign Courts by a Jurisdiction Agreement

The Parties may agree on jurisdiction by adding a jurisdiction clause to the agreement or through a separate jurisdiction agreement. They may also authorise a foreign court by drawing up an agreement. It should be understood that the first point is that the jurisdiction clause shall be in writing. This is because, although the formal requirement is not stipulated in Article 47 of the International Private and Procedural Law, it is required that the jurisdiction agreement shall be in writing for the purpose of proof. 

Another condition required under Article 47 of the relevant law is that the dispute shall involve a foreign element. The element of foreignness may arise from the place of performance or the  nationality of one of the parties in the agreement. For example, a relationship may have a foreign element if one of the parties to the agreement has habitual residence in a foreign country, or if the transaction is realized or completed in a foreign country. A relationship may also have a foreign element due to the reason such as the location being in a foreign country. In the event that foreign courts are authorised in a relationship that does not have a foreign element, even if the dispute is resolved in the agreed court, there is a possibility of encountering the obstacle of "transcendental jurisdiction" when it comes to the point of recognition and enforcement in Turkey.

Another condition for the authorisation of a foreign court is that the Turkish Courts should not have jurisdiction over the dispute. International exclusive jurisdiction of the Turkish Courts under Turkish law arises when it is foreseen that the case will be heard in Turkish Courts. For example, Turkish Courts shall have absolute and exclusive jurisdiction in a dispute concerning the real rights of immovable property. In such cases, if it appears to be authorised by the foreign court, any declaration made in this regard, and any authorisation agreement authorised by the foreign court, shall be invalid. Furthermore, Article 154 of the Execution and Bankruptcy Law also contains exclusive jurisdiction. It should be added that the jurisdiction agreement to be exercised shall not eliminate the authority of Turkish Courts regarding requests for "precautionary attachment" and "interim injunction".

In addition to all this, in the event that a jurisdiction agreement is drawn up under international law, the point that should not be missed is that the dispute shall be based on a debt relationship. In this context, it is not possible to establish a jurisdiction agreement in disputes concerning the law of persons, inheritance law, or family law. This is because a debt relationship cannot be mentioned in these areas. A debt relationship can only arise from agreements, torts, or unjust enrichment.

There is an ongoing debate on the authorisation of a foreign court, and the issue to be addressed is the determination of the authorised court. As a matter of fact, it is not clear how many courts from different countries the parties may authorise, or whether they are required to provide a statement regarding the court's distinguishing features, such as its name or other characteristics. Although there are opinions, the predominant view of the doctrine and the Court of Cassation is that the parties’ courts may be given optional jurisdiction, and the court should be specified in detail when concluding the jurisdiction agreement without the need for further explanation.^[1]

However, it should be noted that there are also decisions of the Court of Cassation in the opposite direction. For example, in the decision of the 11th Civil Chamber dated 17.02.2016 and numbered 2015/7244 E. and 2016/1657 K. the Court of Cassation stated that, in the specific case where the English courts were authorised, "On the other hand, the condition that the foreign state court authorised by the jurisdiction agreement shall be specific, in parallel with the provisions of CCP Articles 17 and 18,  should also be sought in terms of Article 47 of the IPPL. For the court to be accepted as specific, the authorised court shall be mentioned by name. In this respect, without taking into consideration the issues explained by the court, the authorisation clause, which does not fulfill the 'specificity' criteria, stating that 'the … Courts are authorised to hear the case, was deemed valid. For this reason, it was not deemed correct to establish a judgment in the written manner by accepting that it as such, and it required a reversal.".  The court ruled as stated above.

In a jurisdiction agreement where foreign courts are authorised, it is not impossible for the Turkish Courts to hear the case. In this case, for the Turkish Courts to be considered competent for the settlement of the dispute, Article 47 of the International Private and Civil Procedure Law lists two possibilities. The first possibility is when  the authorised foreign court considers itself to be incompetent; the second possibility is that, despite the agreement, if one of the parties brings the dispute before the Turkish Court and the other party does not raise a jurisdictional objection. As can be seen, in cases where the dispute is brought before an unauthorised Turkish court, despite the existence of an authorisation agreement, if no objection to jurisdiction is made, the incompetent Turkish Court will become competent. However, it should not be forgotten that unless the aforementioned possibilities are realized, the jurisdiction of the authorised foreign court shall remain exclusive.

At this point, we would like to emphasise that in cases of breach of the rule of good faith as stipulated in Article 2 of the Turkish Civil Code No. 4721 and the Turkish Code of Obligations No. 6098, and in the existence of the cases of absolute nullity stipulated in Article 27 of the Law, the jurisdiction agreement may be rendered null and void, and the Turkish Courts may become competent.

Furthermore, there is an exceptional provision in Article 47, paragraph 2, of the International Private and Civil Procedure Law: "The jurisdiction of the courts determined in Articles 44, 45, and 46 shall not be eliminated by agreement of the parties.". This regulation specifies some limits. The articles of law referred to in this regulation are, respectively, lawsuits arising from labour relationships, lawsuits arising out of consumer disputes, and lawsuits arising from insurance disputes, where the jurisdiction of Turkish courts is regulated. The reason for the regulation is the idea of protecting the weaker party in the debt relationship. In the event that the subject matter of the debt relationship is a dispute of the above-mentioned type, the jurisdiction of the court cannot be eliminated to the detriment of the weaker party by concluding a jurisdiction agreement. It should be understood from this that the jurisdiction of the designated court shall only apply to labour, and consumer lawsuits and cannot be disposed of to the detriment of the insured/beneficiary. An authorisation agreement against the stronger party in the debt relationship can be concluded. For this reason, with the aforementioned regulation, "limited exclusive authorisation" is envisaged. ^[2]

2.   Jurisdiction of Turkish Courts with a Jurisdiction Agreement