Legal Assistance with International Commercial Agreements
International business transactions frequently involve parties established in different countries, multiple legal systems and contractual obligations performed across borders.
Disputes may arise concerning payment obligations, delivery of goods, contractual performance, termination, liability, jurisdiction or the interpretation of contractual provisions.
Dr. Faruk Özkan, Attorney at Law, provides legal assistance concerning international commercial contracts, cross-border disputes, contractual liability and proceedings involving foreign parties in Turkey.
Dr. Özkan holds a PhD in Private International Law from Istanbul University and an LL.M. from the University of Bonn, with an academic background in German private law, private international law and comparative law.
International Commercial Contracts in Turkey
Cross-border commercial agreements require careful consideration of the parties' obligations and the legal framework governing their relationship.
Common types of international contracts include:
- International sale of goods agreements.
- Distribution and supply contracts.
- Agency and commercial representation agreements.
- International service agreements.
- Construction and consultancy contracts.
- Licensing and technology-related agreements.
- Joint venture and cooperation agreements.
Contract Drafting and Legal Review
Legal assistance may include preparing, reviewing and negotiating contractual provisions concerning payment, delivery, performance standards, warranties, liability, termination and dispute resolution. Clear contractual drafting can reduce uncertainty, although no agreement can eliminate every legal or commercial risk.
Which Law Applies to an International Contract?
Choice of Law Under Article 24 of Law No. 5718
Article 24 of the Turkish Private International Law and International Civil Procedure Act regulates the law applicable to contractual obligations. As a general principle, contractual obligations are governed by the law expressly chosen by the parties or a choice that can be established with reasonable certainty from the contractual provisions or circumstances. The parties may, subject to the applicable requirements, choose the law governing the whole or a part of their contract. Where no valid choice of law exists, the applicable law is determined through the statutory connecting factors, including the law most closely connected with the contract.
Mandatory Rules and Public Policy
A contractual choice of law does not necessarily exclude the operation of internationally mandatory rules or relevant public policy limitations. The effect of a choice-of-law clause must therefore be considered in the context of the transaction and the applicable legal framework.
International Sale of Goods and the CISG
The United Nations Convention on Contracts for the International Sale of Goods (CISG) is an important legal instrument governing certain international sales contracts. Turkey is a contracting state to the CISG. The Convention may apply to qualifying international sales of goods where its requirements are satisfied.
Does Choosing Turkish Law Exclude the CISG?
Not necessarily. Where the CISG is applicable, a contractual clause selecting Turkish law does not, by itself, necessarily exclude the Convention. The CISG forms part of the legal framework applicable in Turkey to transactions within its scope. Article 6 of the CISG allows parties to exclude its application or, subject to the Convention's provisions, derogate from or vary its effects. Accordingly, parties who intend to exclude the CISG should address that intention clearly in their contractual arrangements.
Disputes Under International Sales Contracts
International sales disputes may concern delivery, conformity of goods, payment, remedies for breach, damages and termination. The applicable legal framework may include the CISG, supplementary domestic law and relevant contractual provisions.
Jurisdiction in Cross-Border Commercial Disputes
A dispute involving a foreign party does not automatically fall within the jurisdiction of Turkish courts. The international jurisdiction of Turkish courts is generally determined under Law No. 5718 by reference to the applicable domestic jurisdiction rules, subject to special provisions.
Jurisdiction Agreements
Commercial parties may seek to designate the courts that will hear disputes arising from their contractual relationship. However, the validity and effect of jurisdiction agreements depend on the applicable procedural rules, the nature of the dispute and any mandatory jurisdiction provisions. Article 47 of Law No. 5718 specifically regulates certain agreements designating foreign courts in disputes involving a foreign element. A choice-of-law clause and a jurisdiction clause perform different functions and should be drafted separately.
International Commercial Arbitration
Arbitration may provide an alternative to litigation before national courts. Commercial parties may agree to resolve qualifying disputes through institutional or ad hoc arbitration. Depending on the circumstances, proceedings may be conducted under the rules of institutions such as the International Chamber of Commerce (ICC) or the Istanbul Arbitration Centre (ISTAC).
Drafting Arbitration Clauses
An arbitration agreement should address relevant matters such as the scope of disputes, seat of arbitration, applicable institutional rules and language of proceedings. Poorly drafted arbitration clauses may generate additional disputes concerning jurisdiction or procedure.
Recognition and Enforcement of Foreign Arbitral Awards
Foreign arbitral awards may require recognition or enforcement in Turkey. The applicable framework may include the 1958 New York Convention and relevant provisions of Turkish law. The legal requirements depend on the nature of the award, the applicable treaty framework and the circumstances of the case.
Breach of Contract and Commercial Claims
Cross-border contractual disputes may involve allegations of nonperformance, defective performance, late delivery or failure to pay. Available remedies depend on the governing law, contractual provisions and relevant facts.
Potential claims may concern:
- Payment of outstanding contractual amounts.
- Damages for contractual breach.
- Contractual termination.
- Performance of contractual obligations.
- Contractual penalties, where legally enforceable.
- Interest and recovery of applicable costs.
The availability and scope of these remedies must be evaluated under the applicable law.
Cross-Border Debt Recovery in Turkey
Foreign creditors may seek to recover commercial debts from debtors or assets located in Turkey.
Depending on the circumstances, recovery may involve enforcement proceedings, litigation or recognition and enforcement of a foreign judgment or arbitral award.
The appropriate strategy depends on the underlying legal instrument, available evidence and the debtor's circumstances.
A foreign court judgment is not necessarily directly enforceable in Turkey without satisfying the relevant recognition or enforcement requirements.
Frequently Asked Questions
Contact Dr. Faruk Özkan
For legal assistance concerning international commercial agreements, choice-of-law issues, cross-border contractual disputes, commercial litigation and arbitration-related matters involving Turkey, contact Dr. Faruk Özkan, Attorney at Law.