Turkey: Online Arbitration In Turkish Law

Last Updated: 15 March 2011
Article by Hale Kutlay

Nowadays innumerable contracts/ agreements have been made online, owing to rapid growth of internet technology and the electronic communication techniques. Especially consumer contracts are most frequently concluded through internet. What happens if there is a dispute related to these internet based contracts (electronic contracts) is subject to debate among lawyers

One of the dispute resolution mechanisms is 'arbitration' which aims to resolve the conflicts in shorter time and inexpensive way without litigation proceedings. Classical as well as online arbitration proceedings may be followed either within the scope of an institution or without any institution as "ad hoc". It has been discussed whether a valid arbitration agreement can be done on the internet and arbitration proceedings can be followed online. In practice, parties include arbitration clauses in their contracts formed via e-mail, they can attend to arbitration proceedings through e-mails, even there has been created web sites giving online arbitration services. This article focuses on the validity of an online arbitration agreement and issues which may come up during the arbitration proceedings with particular reference to Turkish law.

Validity of an Online Arbitration Agreement in Turkish Law

Electronic/Online arbitration may be defined as a classical arbitration which can be conducted through communication opportunities offered by the internet. Classical arbitration process is regulated in Turkish Code of Civil Procedure ("TCCP"). According to article 517 of TCCP, a valid arbitration agreement shall show parties intention to arbitrate and be in written form. Written form is explained in articles 12-14 of the Turkish Code of Obligations ("CO") and article 13 of CO demonstrates that cursively signature is the essential element of the written form.

Apart from TCCP, requirement of written form is also handled in International Arbitration Code ("IAC") and New York Convention on Recognition and Enforcement of Foreign Arbitral Awards ("NY Convention"). If there is foreignness at the contract (Foreignness status' are stated in article 2 of the IAC) made between parties IAC rules will be applicable. IAC regulates the form of arbitration agreement. Article 4/2 of IAC indicates that an arbitration agreement shall be in writing. Besides, it is commonly accepted that requirement of written form is fulfilled in online arbitration agreements. As to Turkish Laws, signature is the most significant part of written form whereas under IAC written form can be created without signature. The important thing for IAC is being able to reach the content of the arbitration agreement afterwards. Therefore IAC finds adequate the soft copy written text showing the intentions of parties.

As mentioned above, in some legal systems including Turkish Legal System, it is required that for a valid written form, the document shall be in writing and signed by both parties. However as modern technology allows, written form can be created via e-mails or other communication means although it is not clearly stated in any laws or regulations. In order to have a valid arbitration agreement under Turkish Law, parties shall mutually agree that their e-mail communication will be regarded as a written form of agreement. If there is no such agreement, binding and effective arbitration will not be able to exist thus arbitrators will reject to resolve the dispute, or enforcement of arbitral award will not be possible according to article 5 of NY Convention. NY Convention requires arbitration agreement to be in written form for recognition and enforcement of foreign arbitral awards. Pursuant to the NY Convention Article 2/2: "The term agreement "in writing" shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams." It is commonly agreed that main purpose here is to display the clear intention of parties to arbitrate. Communication means stated in this provision are not numerous clauses, as the term "shall include" specifies. Interpreters of the NY Convention are in the opinion that as traditional means of communication is modernizing, scope of article 2 of NY Convention must be regarded with a broader perspective. As a matter of fact, there has been an advisory jurisdiction manifesting that the means of arbitration agreement stated in article 2 shall not be interpreted in a restrictive manner. Therefore an arbitration clause in an electronic contract and a separate online agreement to arbitrate may both constitute valid arbitration agreements under NY Convention. However under Turkish Law, as stated above, parties signatures must be included under the written text showing the intentions of parties to arbitrate. As soon as the use of electronic signature becomes widespread, correspondingly valid arbitration agreements may come into effect under Turkish Law and online arbitration may be the most frequently referred dispute resolution mechanism.

Probable Issues in Online Arbitration

It may be an obstacle for arbitrators to follow up proceedings online. For example in classical arbitration and litigation, hearings and examination of witnesses have significant importance in occurring of personal conviction of judges or arbitrators. At online arbitration proceedings, it will be difficult to acquire such personal conviction.

Place of arbitration must be specified in online arbitration agreement. If parties do not determine a place, arbitrators will do so. Determining the place of arbitration is important, because if parties have not agreed on the applicable law of procedure, laws of place of arbitration will be applicable. In fact online arbitration does not take place in a certain spot, therefore it is said to be "de-localized arbitration" by Cybertribunal which is an institution giving online arbitration service.

Enforcement of an online arbitration may cause some problems because arbitrators give and announce their decisions online without signing. Unless there's an electronic signature on the arbitral award, its enforcement in Turkey will be prevented, because just-as a valid arbitration agreement, a valid arbitration award has to be in written form with signatures of both parties. At practice, arbitrators have signatures on hard copy of the arbitral awards, so the arbitral awards are being partially online. Whenever electronic signature becomes widely used and arbitrators can sign soft copy of their decisions, arbitration proceedings can be completed wholly as online.

According to some legal opinions in Turkish legal doctrine, online arbitration shall only be applied to consumer contracts formed via internet. In practice most of the online dispute resolution services deal with consumer disputes rather than commercial. There are many consumer contracts made on internet and number of them is gradually increasing. In these contracts, consumer do not come face to face with seller, therefore it is problematic to submit the dispute before a court. Even consumer may not know sufficient information about seller that will enable him/her to bring a lawsuit. For these reasons online arbitration is reasonably convenient for consumers.

In conclusion, it is indisputable that internet has been an important part of our daily lives, not only it has a great role in our communication, but also it has been expediting our commercial relationships. Notwithstanding, in practice some difficulties may come up, and online arbitration offers practical, cheaper and convincing results for the parties of an online contract as an alternative dispute resolution mechanism. In case of a valid arbitration agreement, binding and enforceable online arbitral award may come into existence and that way disputes will be resolved in shorter times within the framework of opportunities provided by communication technology.

www.gsimeridian.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Erdem & Erdem Law
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Erdem & Erdem Law
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions