InternationalTrade Law
Cross-border sale, distribution and carriage contracts, as well as international arbitration, customs and disputes involving a foreign element.
International trade law covers commercial relationships between parties located in different countries, the determination of the applicable law, international sale contracts and the resolution of cross-border disputes.
Scope
International trade law covers trade in goods and services between parties located in different countries, distribution and agency relationships, carriage and customs procedures, and the resolution of disputes arising from them. In a relationship involving a foreign element, which country’s courts have jurisdiction and which law applies to the contract are determined under Law No. 5718 on Private International Law and International Civil Procedure (MÖHUK); the parties may, as a general rule, choose the law applicable to the contract (Art. 24). In the sale of goods, the United Nations Convention on Contracts for the International Sale of Goods (the Vienna Sales Convention, CISG) applies directly in the contracting states unless excluded by the parties.
In international transactions, it is important for the contract to specify clearly the language, the currency, the delivery terms and the means of payment. The International Chamber of Commerce’s Incoterms delivery terms and the UCP 600 rules on letters of credit are frequently used; however, expressly incorporating them into the contract and specifying which version applies reduces the likelihood of disputes. Customs procedures are subject to Customs Law No. 4458 and the related regulations, while carriage relationships are subject to Turkish Commercial Code No. 6102 and to the CMR and similar international conventions.
Frequently encountered matters
- Drafting and review of international sale, supply, distribution and agency agreements.
- Determination of the applicable law, the competent court and arbitration clauses.
- Assessment of whether the CISG applies; notice of non-conformity and avoidance of the contract.
- Disputes arising from letters of credit, cash against documents and other payment methods.
- Customs procedures, and disputes concerning origin, tariff classification and customs value.
- Carrier liability and notice of damage in road, sea and air carriage.
- Termination of agency and distributorship relationships and goodwill indemnity claims.
- Recognition and enforcement of foreign court judgments and arbitral awards.
- The status of contractual provisions such as standard terms and conditions, penalty clauses and hardship in transactions involving a foreign element.
- Compliance with export controls and sanctions regulations.
Process and points to note
In cross-border transactions, a contract that clearly states the applicable law and the forum for dispute resolution makes subsequent processes easier. If the contract contains an arbitration clause, the dispute is resolved before an arbitral tribunal in accordance with the agreed rules; for disputes involving a foreign element where the seat of arbitration is Türkiye, International Arbitration Law No. 4686 applies. If an action is brought before a court in a dispute covered by an arbitration clause and the other party raises an arbitration objection in due time, the action is dismissed on procedural grounds.
For a foreign court judgment to be enforced in Türkiye, an action for enforcement (exequatur) must be brought; this action is heard by the civil court of first instance under Art. 50 et seq. of MÖHUK, and conditions such as the judgment having become final and reciprocity are required. Foreign arbitral awards, on the other hand, are recognised and enforced within the framework of the 1958 New York Convention. The objection and litigation routes against customs procedures vary according to the nature of the procedure. The agent’s right to claim a goodwill indemnity upon termination of the agency relationship is regulated in Art. 122 of the Turkish Commercial Code (TTK); the conditions of this right are determined by assessing the contractual and statutory provisions together. In distribution and dealership agreements, by contrast, as there is no separate statutory regulation, the contractual provisions and the general provisions come to the fore.
In commercial cases, for claims concerning a monetary receivable, mandatory pre-litigation mediation applies in Türkiye: an application must be made to a mediator before an action is brought (TTK Art. 5/A); however, in disputes covered by an arbitration clause, the route of recourse is determined by the provision in the contract. In commercial sales, the buyer’s obligations to inspect the goods and to give notice of defects are subject to short time limits (TTK Art. 23).
Our office’s approach
When contracts are drafted, the applicable law and the forum for dispute resolution are determined first, and the commercial terms and payment conditions are then written into the text. When a dispute arises, the arbitration, court and enforcement routes are compared on the basis of the documents and the time limits.