Turkey: Jurisdiction Agreement

Last Updated: 4 August 2011

According to Article 9 of the Civil Procedure Code ("CPC") of 18 June 1927 numbered 1086, which is still in force and which will remain in force until 1 October 2011, all lawsuits are to be filed in the court of the domicile of the defendant unless otherwise stated in the Code. Article 10 of the CPC determines the jurisdiction for conflicts arising from agreements. Pursuant to this article, the lawsuit will be filed in the court of the place where the agreement will be enforced or where the agreement was concluded under the condition that the defendant or its representative is there at the time of the lawsuit.

On the other hand, pursuant to Article 22 of the CPC, the parties may agree on jurisdiction of a place which does not have the jurisdiction if the issue is not concerned with public policy. However, it is not possible to abrogate the jurisdiction of the general and special competent courts with a jurisdiction agreement. In this case, the lawsuit may be filed not only in the competent court according to a jurisdiction agreement but also in the legally competent court.

The Court of Appeal accepts the aforementioned principles in its consistent precedents.

According to the Court of Appeal, if the issue is not concerned with public policy, the parties may agree on jurisdiction by a court which is not competent regarding certain conflicts to arise between them. However, if the issue is concerned with public policy, such as rights in rem on immovables or divorce etc., the parties may not conclude a jurisdiction agreement and if they do, it will be invalid. These principles are regulated in Article 22 of the CPC.

It must be stated that the provision of Article 22 of the CPC may not be accepted as it is stipulated in order to exclude the jurisdiction of the court which is competent.

Interpretation of this article against this principle will result in the validity of negative jurisdiction agreements, but this sort of agreement is inferred as distrust by some courts and as against the public policy, and, therefore, they will be deemed invalid. Moreover, the jurisdiction provisions accepted in the jurisdiction agreement will be deemed as abrogated in favor of the party which benefits from this right, and the party which benefits from the provision arising from the agreement and stated in favor of one party may use its right arising from the CPC and file a lawsuit in the legally competent court, waiving its right in the jurisdiction agreement. As a result of these principles, the jurisdictions of general and special competent courts will not be abrogated by a jurisdiction agreement.

However, the new Civil Procedure Code ("New CPC") of 12 January 2011 numbered 6100 which was published in the Official Gazette of 04 February 2011 numbered 27836 and which will enter into force on 1 October 2011 modifies totally the system for jurisdiction agreements. Article 17 of this code regarding jurisdiction agreements is as follows:

Jurisdiction Agreement

Article 17 – (1) The merchants and the public legal entities may agree on the competence of one or more than one court regarding an existing or possible conflict between them. Unless otherwise stipulated by the parties, the lawsuit can be filed only in the court which is determined in the agreement.

As is obvious from the text of the article, with the New CPC, the consistent precedents of the Court of Appeal regarding the jurisdiction agreements and the practice will be completely changed.

This modification is explained in details by the Legislature in the grounds for this article.

The grounds are as follows:

The regulation regarding jurisdiction agreements makes a distinction between merchants or public legal entities and other persons in respect of the conclusion of jurisdiction agreements. The merchants and the public legal entities may be evaluated as on an equal position among themselves. On the other hand, the merchants and the public legal entities are more powerful against a real person. It is necessary to protect the less powerful persons against merchants and public legal entities, which are more powerful. Especially in standard agreements where consumers are obliged to sign documents that the seller or service provider companies submit to them without any chance of negotiation, they have to accept the terms and conditions stipulated unilaterally by the company or public legal entity, jurisdiction clause among them. Therefore, for example in German law, the issues concerning which jurisdiction agreements can be concluded are limited.

In the transactions effectuated by merchants and public legal entities between themselves, there is no less powerful party. It is possible to consider the parties as equal to each other. These persons are entitled to conclude jurisdiction agreements between themselves provided that the requirements of the code are respected. The parties may also agree on the exclusivity of the jurisdiction agreement in which they agreed on jurisdiction of one or more than one court.

As can be seen, merchants and public legal entities are entitled to conclude exclusive jurisdiction agreements whose validity was discussed in Turkish law. Unless otherwise stipulated in the agreement by the parties, lawsuits can only be filed in the court or courts determined in the agreement. In that case, the jurisdiction agreement is an exclusive agreement unless the parties stipulate otherwise. If the parties wish to have the legal jurisdiction of general and special competence of courts in addition to the jurisdiction of the court stated in the agreement, i.e., they wish to have a non-exclusive jurisdiction agreement, it must be clearly stated in the jurisdiction agreement.

Persons other than merchants and public legal entities, especially consumers, need to be protected against the merchants and public legal entities since the consumers are less powerful than the merchants and public legal entities. To this end, the aim is to prevent the conclusion of jurisdiction agreements between merchants or public legal entities and consumers.

Accordingly, merchants and public legal entities cannot conclude a jurisdiction agreement with a person who lacks these qualities. It must be also stated that persons apart from merchants and public legal entities cannot conclude jurisdiction agreements between themselves either.

Thus, it is possible to reach the consequences below as a result of an examination of the text of Article 17 of the New CPC and its legal ground:

1. Following the entry into force of the New TCC, jurisdiction agreements can be concluded only between merchants or public legal entities. Jurisdiction agreements cannot be concluded between merchants or public legal entities and consumers. There will not be any jurisdiction clause in agreements concluded between consumers and sellers or service provider companies that consumers have to sign without any opportunity for negotiation.

2. The validity to exclusive jurisdiction agreements between merchants and public legal entities whose validity was discussed in Turkish law is granted. Unless otherwise stipulated in the agreement by the parties, lawsuits can be filed only in the court or courts determined in the agreement. In that case, the jurisdiction agreement is an exclusive agreement unless the parties stipulate otherwise. In current practice, the Court of Appeal does not accept exclusive jurisdiction agreements.

3. The parties may agree to the jurisdiction of more than one court with a jurisdiction agreement. This issue is not accepted by the Court of Appeal. According to the Court of Appeal, it is necessary to agree on the jurisdiction of only one specific court. The parties cannot agree on jurisdiction by more than one court.

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.

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