Why Arbitration Clauses Fail in Practice
In our experience advising on Turkey-related commercial contracts, the same handful of drafting errors recur across sectors:
- Ambiguous or layered dispute resolution provisions – contracts that refer disputes to both arbitration and the courts of a given jurisdiction, without clarifying which mechanism prevails or in what circumstances.
- Unclear seat selection – referring generally to “arbitration in Turkey” without specifying the seat, the applicable rules, or the institution, leaving room for dispute over which procedural law governs.
- Mismatched governing law and seat – selecting a seat without considering how the governing law of the contract interacts with the procedural law of the seat, particularly where Turkish law and English law diverge on questions such as limitation periods or the validity of certain remedies.
- No provision for multi-tier dispute resolution – omitting mandatory negotiation or mediation steps where the parties intended a tiered process, creating later arguments over whether arbitration was validly commenced.
Breaking Down Employment Law
The languages only differ in their grammar, their pronunciation and their most common words. Everyone realizes why a new common language would be desirable: one could refuse to pay expensive translators.
- To achieve this, it would be necessary to have uniform grammar, pronunciation and more common words.
- If several languages coalesce, the grammar of the resulting language is more simple and regular than that of the individual languages.
The new common language will be more simple and regular than the existing European languages. It will be as simple as Occidental.
Core Elements of a Well-Drafted Clause
Seat, Rules and Institution
The clause should specify the seat of arbitration (which determines the procedural law and the courts with supervisory jurisdiction), the institutional rules to be applied — whether ICC, LCIA, ISTAC or another institution — and the number and method of appointment of arbitrators.
Scope of Disputes Covered
Broad language (“any dispute arising out of or in connection with this agreement”) is generally preferable to narrower formulations, which can give rise to satellite litigation over whether a particular claim falls within or outside the clause.
Interim Relief and Emergency Arbitrator Provisions
Including express reference to interim relief mechanisms — whether through an emergency arbitrator or through the supervisory courts at the seat — ensures parties are not left without protection in the period before a tribunal is constituted.
English Law and Turkish Law Contracts: A Dual Perspective
Many cross-border contracts involving Turkish parties are governed by English law, while disputes may still need to be enforced against Turkish assets or Turkish counterparties. Drafting from a dual-qualified perspective — considering both how an English law-governed clause will be interpreted and how an eventual award will be enforced in Turkey — materially reduces the risk of a clause that looks sound on paper but creates practical enforcement difficulties.
Reviewing Your Existing Contracts
For businesses with a portfolio of existing Turkish-related contracts, a periodic review of dispute resolution clauses — particularly in long-term supply, distribution, construction and joint venture agreements — is a low-cost way of identifying exposure before a dispute actually arises.
Tekin & Counsel regularly advises on the drafting and review of arbitration and dispute resolution clauses in commercial contracts governed by both Turkish and English law, with particular attention to enforceability and practical dispute outcomes.
Everyone realizes why a new common language would be desirable: one could refuse to pay expensive translators. To achieve this, it would be necessary to have uniform grammar, pronunciation and more common words. If several languages coalesce, the grammar of the resulting language is more simple. Their separate existence is a myth.
