Governing Law and Jurisdiction in Turkish Contracts

Governing law and jurisdiction in contracts with Turkish companies answer separate questions. A governing-law clause concerns the law applied to contractual obligations. A jurisdiction clause concerns the court intended to hear the dispute. An arbitration clause provides for arbitration, while enforcement in Turkey addresses what can be done with a resulting foreign judgment or award (5718 sayılı Milletlerarası Özel Hukuk ve Usul Hukuku Hakkında Kanun m.24, m.47, m.50, m.60; 4686 sayılı Milletlerarası Tahkim Kanunu m.4).

A contract review should make each intended choice identifiable and check its legal conditions. Writing only that an agreement is subject to English law does not express a choice of English courts. Naming a foreign court does not itself authorise execution against assets in Turkey. The distinctions matter at drafting, when a dispute starts and when a creditor seeks enforcement.

1. Governing Law and Jurisdiction: Four Separate Decisions

Governing law and jurisdiction should be assessed through the different legal functions of each clause. The international jurisdiction of Turkish courts follows domestic territorial-jurisdiction rules, while a qualifying foreign-court agreement has its own provision. The substantive law of contractual obligations is governed by the separate choice-of-law rule (5718 sayılı Milletlerarası Özel Hukuk ve Usul Hukuku Hakkında Kanun m.24, m.40, m.47).

Decision	Question answered	Separate issue still requiring review
Governing law	Which law governs the contractual obligations?	Mandatory-rule limits and the chosen law’s scope
Court jurisdiction	Which state court is designated?	Validity, exclusivity and any protected or exclusive forum
Arbitration	Which disputes are submitted to arbitration?	Written agreement, applicable framework and arbitrability
Enforcement	Can the resulting foreign judgment or award be executed in Turkey?	The applicable enforcement regime and its conditions

This table is a drafting framework, not a statement that every contract needs all four types of clause. A court clause and an arbitration clause covering the same disputes need a coherent allocation. Before copying a precedent, identify the intended forum, disputes covered and place where any resulting decision may need to be used.

2. Governing Law in Turkish Commercial Contracts: Choosing Foreign Law

Governing law for contractual obligations with a foreign element can be chosen expressly. A choice ascertainable without doubt from the contract’s terms or the circumstances is also valid. The parties may choose a law for the whole contract or only part of it, and may make or change that choice at any time (5718 sayılı Milletlerarası Özel Hukuk ve Usul Hukuku Hakkında Kanun m.24/1-3).

A partial choice needs an identifiable boundary. If one law is intended to govern a particular obligation, specify the obligation and how it relates to the rest of the agreement. Article 24 permits partial selection, but its wording does not answer every interaction between differently governed obligations.

A post-contract choice has retroactive effect under the provision, with third-party rights reserved. A clause amendment should therefore record what the parties are changing rather than assume that every earlier consequence affecting others is rewritten (5718 sayılı Milletlerarası Özel Hukuk ve Usul Hukuku Hakkında Kanun m.24/3).

The law-choice analysis is also limited by the subject being addressed. A contract concerning a Turkish company’s shares should separately examine the corporate transfer requirements. The share purchase agreement guide explains those steps, while the shareholders’ agreement guide distinguishes investor promises from rights requiring company-document provisions.

3. Governing Law in Turkish Commercial Contracts: No Choice or Mandatory Limits

Governing law in the absence of a choice is determined, for obligations within Article 24, by the law most closely connected with the contract. The provision identifies the characteristic performer and, for commercial or professional contracts, that person’s business establishment at the time the contract was made. It also addresses multiple establishments and permits a different law where all circumstances indicate a closer connection (5718 sayılı Milletlerarası Özel Hukuk ve Usul Hukuku Hakkında Kanun m.24/4).

The analysis requires the actual contract and performance arrangement. A supplier’s location, buyer’s location and payment destination should not be turned into an automatic rule without identifying the characteristic obligation and the statutory qualification. Other types of relationship can also fall under provisions beyond the general contractual rule.

Choosing foreign law has limits. A foreign provision clearly contrary to Turkish public order is not applied; Turkish law is applied where considered necessary. Turkish directly applicable rules also apply where their regulatory purpose and scope cover the situation, despite the foreign law otherwise governing it (5718 sayılı Milletlerarası Özel Hukuk ve Usul Hukuku Hakkında Kanun m.5-6).

Article 31 separately permits effect to be given to directly applicable rules of a third state’s law where the contract is closely connected with that state. The purpose, nature, content and consequences of those rules are considered. That is a distinct test, not a general licence to apply any rule from any country involved in the transaction (5718 sayılı Milletlerarası Özel Hukuk ve Usul Hukuku Hakkında Kanun m.31).

For foreign investors, contractual law selection should therefore sit alongside the business’s actual Turkish-law obligations. Formation is addressed in company registration in Turkey, while taxation of foreign companies in Turkey concerns a separate regulatory assessment.

4. Jurisdiction Clauses in Turkish Contracts: Designating Turkish Courts

Jurisdiction clauses designating courts under the Civil Procedure Code are available between merchants or public legal entities for disputes that have arisen or may arise between them. Unless the parties agree otherwise, proceedings are brought only in the designated courts. The parties’ status and any intended nonexclusive arrangement therefore need express review (6100 sayılı Hukuk Muhakemeleri Kanunu m.17).

The agreement must be written, concern a determined or determinable legal relationship and identify the court or courts. Parties cannot make a jurisdiction agreement for matters outside their free disposition or in situations of exclusive jurisdiction (6100 sayılı Hukuk Muhakemeleri Kanunu m.18).

A clause should identify the intended courts and dispute scope. A vague statement that Turkish law applies does not satisfy the separate task of designating courts. Nor should an agreement about territorial venue be presented as creating subject-matter jurisdiction for any chosen type of court.

Without a controlling clause or special rule, the general territorial forum is the defendant’s domicile when the action is filed. Contract actions may also be brought where the contract is to be performed. Certain company membership disputes have an exclusive forum at the legal entity’s head office under the provision’s conditions (6100 sayılı Hukuk Muhakemeleri Kanunu m.6, m.10, m.14/2).

The preparation needed for an actual commercial action is covered in suing a Turkish company from abroad. Corporate causes of action need the separate review in shareholder disputes in Turkey.

5. Jurisdiction Clauses in Turkish Contracts: Choosing Foreign Courts

Jurisdiction clauses choosing a foreign state’s courts are addressed by Article 47 for disputes arising from obligations with a foreign element, where territorial jurisdiction is not determined on an exclusive basis. The agreement is valid if proved by written evidence. The statutory conditions should be checked against the actual relationship rather than inferred from a foreign-language contract alone (5718 sayılı Milletlerarası Özel Hukuk ve Usul Hukuku Hakkında Kanun m.47/1).

Under that provision, the competent Turkish court can hear the case if the foreign court considers itself without jurisdiction or no jurisdiction objection is made in the Turkish proceedings. The drafting review and the response to an actual lawsuit are therefore separate tasks. A clause that has been agreed still requires the procedural question to be addressed when proceedings begin (5718 sayılı Milletlerarası Özel Hukuk ve Usul Hukuku Hakkında Kanun m.47/1).

The provision also reserves the courts identified by Articles 44, 45 and 46 against exclusion by agreement. This guide concerns commercial company contracts; a contract involving a protected relationship cannot be assumed to follow the same forum freedom merely because one party is a company (5718 sayılı Milletlerarası Özel Hukuk ve Usul Hukuku Hakkında Kanun m.47/2).

Review the chosen country’s jurisdiction position and the contract’s scope before relying on the clause. The Turkish provision describes the Turkish-law conditions; it does not by itself establish that the nominated foreign court will accept every dispute placed before it.

6. Arbitration Clauses in Turkish Contracts: A Separate Agreement

Arbitration clauses in Turkish contracts should be distinguished from clauses choosing state courts. Under the International Arbitration Law, an arbitration agreement is an agreement to submit all or specified disputes arising from an existing legal relationship to arbitration. It can appear as a clause in the main contract or as a separate agreement (4686 sayılı Milletlerarası Tahkim Kanunu m.4).

The applicable framework must first be established. The International Arbitration Law applies to disputes with a foreign element where the seat is Turkey or its provisions have been selected by the parties or arbitrators, subject to the statute’s scope. Its exclusions include disputes concerning rights in rem over immovable property in Turkey and disputes not subject to the parties’ free disposition; international treaty provisions are reserved (4686 sayılı Milletlerarası Tahkim Kanunu m.1).

Where that law applies, the arbitration agreement must satisfy its written-form provision. The statute addresses signed documents, exchanges through the identified communications media or electronic form, the stated pleading situation, and incorporation by reference meeting its conditions. A contractual governing-law clause should not be treated as resolving the arbitration agreement’s own validity rule (4686 sayılı Milletlerarası Tahkim Kanunu m.4).

For drafting, identify the disputes submitted to arbitration and make the selected procedure, seat and any court role intelligible together. That is a document-consistency check; it does not establish that every corporate dispute is arbitrable or that a foreign award is automatically enforceable in Turkey.

7. Governing Law and Jurisdiction: Enforcement Against Turkish Assets

Governing law and jurisdiction choices should be considered alongside the anticipated place of enforcement. A final foreign civil judgment requires an enforcement decision from the competent Turkish court before it can be executed in Turkey. Article 54 separately addresses reciprocity, exclusive jurisdiction, public order and the stated grounds relating to notice and representation (5718 sayılı Milletlerarası Özel Hukuk ve Usul Hukuku Hakkında Kanun m.50, m.54).

A foreign-court clause does not supply all those conditions. Before selecting a forum, identify where the counterparty’s relevant assets are and which enforcement regime would have to be used. The UAE judgment enforcement guide explains one country-specific assessment; the same country-specific conclusion should not be transferred to a judgment from elsewhere without review.

Foreign arbitral awards have a distinct enforcement regime. The domestic statutory provisions address awards that are final and enforceable or binding and list refusal grounds, while the applicable treaty framework must also be assessed. Court judgments and arbitral awards should not be treated as interchangeable instruments (5718 sayılı Milletlerarası Özel Hukuk ve Usul Hukuku Hakkında Kanun m.60, m.62; 4686 sayılı Milletlerarası Tahkim Kanunu m.1).

For an unpaid contractual sum without an existing judgment or award, the starting procedural choice is explained in debt collection in Turkey. Clause drafting, bringing the merits claim and executing a resulting decision are separate stages; the contract should leave each intended choice clear enough to assess at the stage where it matters.