Originally from: Baker & McKenzie International Arbitration Yearbook: 2012-2013

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A. LEGISLATION, TRENDS AND TENDENCIES

The International Arbitration Law, Law No. 4686 (“IAL”), continues to be the applicable law in relation to international arbitrations conducted in Turkey. There have been no legislative amendments in 2012.

B. CASES

B.1 The Incorporation of an Arbitration Clause by Reference In a recent case, the 11th Civil Division of the Court of Appeal3 had to decide whether or not an arbitration clause contained in a charter-party was validly incorporated into a bill of lading. The contract in question was for the delivery of wheat by the claimant. The voyage was from the port of Sevastopol, Ukraine to the port of Samsun, Turkey. Upon arrival of the goods at the port of discharge, a deficiency of 86 tons was discovered, with a  value of TRY 52,140. An injunction was obtained by the claimant to prevent the vessel from sailing without the damages being compensated for. The claimant then commenced proceedings against the defendant before the commercial court of first instance. One of the defenses raised by the defendant was that the matter should be heard by an arbitral tibunal due to the fact the matter should be heard by an arbitral tribunal due to the fact that the bill of lading contained a clause incorporating the terms of the charter-party, which contained an arbitraiton clause. The arbitration objection, as it is referred to under IAL, was accepted by the court and the claim was dismissed on the grounds of lack of jurisdiction. The court reasoned that since the bill of lading incorporated the charter-party by way of reference, (which in turn contained an arbitration clause) the arbitration clause was validly incorporated and that any dispute arising therefrom should be referred to arbitration.