International Commercial Law

International Commercial Law is a branch of law governing commercial relations that transcend national borders, encompassing concepts such as freedom of contract, arbitration, double taxation, and foreign investment. This field is shaped by international conventions, domestic legal norms, and the jurisprudence of higher courts. It is imperative for companies to be conversant with this legal discipline to conduct lawful and sustainable commercial activities at an international level.

International commercial law is a branch of law concerned with the regulation of commercial relations transcending national borders, shaped by international norms and operationalized through its reflections in domestic law. The fundamental concepts of this field include freedom of contract, equality of parties, contractual autonomy, and dispute resolution mechanisms through arbitration or judicial proceedings. Particularly with the diversification of commercial activities on a global scale, the significance of this legal branch has further increased.

The Turkish legal system, in determining the rules of international trade, has established a hybrid system by considering both established national jurisprudence and the considerations of the European Court of Human Rights and the Constitutional Court. Therefore, it is evident that the established order is not solely based on domestic legal provisions but also takes into account international instruments and customs.

At this juncture, the primary question to be posed is: Upon which sources do Turkish courts rely when adjudicating international commercial disputes? In response, it should be noted that Turkish courts primarily base their decisions on domestic legal provisions, specifically those within the framework of Turkish Law of Obligations and Turkish Commercial Law; however, in cases where a dispute bears an international dimension, they may also rule for the application of foreign law in accordance with the provisions of the Law on International Private and Procedural Law (MÖHUK).

The mere fact that one of the parties to a contract is foreign is not sufficient, in itself, for the said agreement to be considered within the scope of international commercial law. Factors such as legislative differences in the countries where the parties are domiciled, the place of performance of the contract, the means of payment, and the mode of delivery can also impart an international character to the contract. Consequently, in such contracts, frequent recourse is made to the Incoterms rules prepared by the ICC (International Chamber of Commerce).

While different approaches have been observed in Turkish jurisprudence regarding the binding nature of such rules, the Civil Chambers of the Regional Courts of Appeal predominantly render decisions based on the conviction that such customs are consistent with the exigencies of commercial life. As is understood, these practices both enhance trust between the parties and prevent uncertainties that may arise from disputes.

In the resolution of disputes, the frequent inclusion of an arbitration clause by parties ensures the swift resolution of commercial disputes through expert individuals. However, Turkish courts conduct public policy review during the enforcement phase of arbitral awards and, in this context, occasionally exhibit reluctance to recognize foreign arbitral awards. Nevertheless, the Constitutional Court has repeatedly emphasized in its decisions that the scope of this review should be narrowly construed.

The jurisprudence of the European Court of Human Rights has also established that the right to a fair trial is applicable to commercial cases and has thus provided guidance that particular attention should be paid to the principle of equality of arms in arbitration proceedings. In light of this jurisprudence, it has been emphasized that Turkish judicial authorities should not favor one party over another in dispute resolution, and that this principle should be established not only formally but also substantively.

Given that judicial awards rendered by courts in international commercial disputes directly affect not only domestic law but also the interests of the parties, it is essential for judges to be conversant with both domestic law and international norms. Otherwise, the enforcement or recognition of judicial decisions by foreign courts becomes arduous, thereby undermining the security of trade.

In this context, a second query gains significance: How should the applicable law be determined when concluding a contract in international trade? Namely, if the parties have not explicitly designated a legal system in the contract, the law with which the agreement has the closest connection shall apply in accordance with the provisions of the Law on International Private and Procedural Law. In such instances, an assessment is made by examining factors such as the place of performance, the commercial centers of the parties, the language of the contract, and the currency.

Regarding enforceability, the provisions of Law No. 5718 are applied for the recognition and enforcement of judgments rendered by foreign courts in Turkey. A notable point here is the requirement for the party seeking enforcement to demonstrate that the opposing party's right to defense has been respected. Otherwise, regardless of how meritorious the decision may appear, it will not be recognized by Turkish courts.

The jurisprudence of the Court of Cassation indicates that provisions in international commercial contracts, even if shaped by the will of the parties, may be deemed null and void if they contravene public policy. This demonstrates that commercial freedom is not absolute but is subject to certain limitations. Conceptually, this signifies that the legal order, while protecting commercial life, also takes into account the general interest of society.

It is also observed that pre-contractual negotiations (culpa in contrahendo) are protected to a certain extent under Turkish law and are interpreted within the framework of the principle of good faith. Except for some exceptional decisions, the prevailing view is that a breach of such obligations gives rise to liability for damages.

Furthermore, with the digitalization of commerce, e-commerce contracts have also acquired an international character. This development is transforming the tendency in the Turkish legal system to seek written contracts and is giving rise to new considerations regarding the validity of electronic contracts. Consequently, uniformity has not yet been achieved in Turkish jurisprudence on this matter.

In disputes pertaining to commercial law, the parties' obligation to present evidence is assessed within the framework of the principle of good faith. The presence of malicious conduct in the submission of evidence, if perceived by the court, may lead to adverse consequences. This necessitates that the parties to a dispute present not only their claims but also the means of proving these claims in accordance with legal principles.

Individuals and entities involved in international trade require a legal infrastructure that safeguards not only their economic interests but also their legal security. At this juncture, to prevent uncertainties and ambiguous provisions that may arise in practice, an examination conducted by an expert in the field is essential not only legally but also for commercial stability. It should be noted, albeit indirectly, that in resolving disputes that may arise at an international level, consulting a professional with technical expertise for a detailed consideration of the relevant processes and the determination of appropriate strategies should ultimately be regarded as the most prudent course of action.

Our Law Firm provides the following principal services in the field of international commercial law:

Drafting and Evaluation of Agreements with Foreign Companies: In the process of drafting and evaluating international contracts, the intentions of the parties must be clearly, intelligibly, and legally bindingly reflected, in conformity with the fundamental principles of international contract law. During this process, the compliance of the said agreements with Turkish legislation, international customs, and the legal system preferred by the parties must be meticulously examined. Namely, as the Constitutional Court has repeatedly indicated, the freedom of contract of the parties may be limited by public policy. Therefore, it becomes a perceived necessity, particularly in arrangements made by a law firm, for contract provisions to contain clear and unambiguous terms capable of preventing future disputes.

Review of Commercial Law, Foreign Capital Investment Legislation, Tax Law, Labor Law, and Other Relevant Legislation of the Target Country for Overseas Investments, and Provision of Written and Oral Information: Overseas investments must be meticulously planned not only from an economic perspective but also from a legal standpoint. In this context, a detailed review of the legislation of the target country, such as commercial, tax, and labor law, is required to determine whether the relevant norms will yield favorable outcomes for the investor. The jurisprudence of the European Court of Human Rights concerning freedom of work and investment should be taken into account in these evaluations; potential disputes in subsequent processes should be anticipated from the outset, and a preventive legal approach should be adopted. Ultimately, this examination, conducted within the possibilities foreseen by the legislation, ensures the legal protection of the investor.

Legal Evaluation Based on Turkish Law and International Regulations in Disputes Arising from Commercial Relations with Foreign Companies: In resolving disputes arising from international commercial relations, issues such as determining the applicable legal system between the parties and recourse to arbitration or judicial proceedings depending on the nature of the dispute are evaluated in line with established jurisprudence. Decisions of the Court of Cassation and the Regional Courts of Appeal, in particular, demonstrate that judgments should be rendered in such disputes to establish justice by maintaining a balance between the parties. Consequently, when conducting such evaluations, not only Turkish law but also the foreign legal system chosen by the parties and international treaty norms must be duly considered.

Drafting of Specialized Contracts within the Scope of International Commercial Law, including the ICC Model International Sale Contract, Franchising, Distributorship, Sole Agency Agreements, and Hybrid Contracts: The drafting of frequently used contract types in international trade, particularly based on model texts developed by the ICC (International Chamber of Commerce), is essential for preventing disputes that may arise between parties. Structures such as franchising, distributorship, and sole agency agreements must clearly regulate party obligations and exclusivity relationships. Considering that hybrid contracts naturally encompass more than one contract type, constitutional property guarantees and the jurisprudence of the ECHR concerning the protection of private property should not be overlooked during their preparation. This service is crucial for the legal validity and enforceability of contracts.

Advising National Companies on European Union Law and European Community Legal Norms: For national companies conducting business with or contemplating business in the European Union, the examination and correct interpretation of EU legislation and European Community legal norms are of paramount importance. Namely, activities inconsistent with EU norms in areas such as competition law, environmental legislation, consumer protection, and customs regulations may incur sanctions. The decisions of the Court of Justice of the European Union and the recommendations of the Council of Europe serve as guiding principles in this regard, making it imperative for companies to align their activities with these norms. This service provides legal stability for companies to operate in the European market.

Provision of Legal Opinions on Tax and Double Taxation Issues in International Investments. Ensuring Exporter Companies' Activities Comply with Foreign Trade Legislation and GATT Provisions through Appropriate Information Dissemination: The correct interpretation and application of double taxation treaties are crucial for both cost and legal liability. According to international taxation principles, the prevention of repetitive taxation provides legal certainty to the investor. GATT provisions and developments in foreign trade legislation play a decisive role in how exporters should structure their activities. Particularly, the opinions provided on these matters are based on detailed research and acquired knowledge by the law firm, and are formulated in accordance with the spirit of jurisprudence. This ensures that companies can operate confidently in the international market.

Provision of Legal Consultancy Services on Foreign Capital Transfer and Investment Incentives: In cases where foreign investors undertake capital transfer to Turkey, it is imperative to examine the administrative and legal procedures they may encounter and to provide guidance in accordance with investment incentive legislation. For in such investments, frequently encountered bureaucratic hurdles and legislative discrepancies can lead to delays or cancellation of transactions. However, tax exemptions, customs advantages, and similar applications provided to investors through incentive systems must be correctly interpreted within the legal framework and utilized to the investor's benefit. Decisions of the Regional Courts of Appeal indicate that these matters should be interpreted favorably for the investor. Accordingly, consultancy services ensure that investment processes are conducted lawfully and efficiently.

Legal Evaluation Based on Turkish Law and International Regulations in Disputes Arising from Commercial Relations with Foreign Companies:In resolving disputes arising from international commercial relations, issues such as determining the applicable legal system between the parties and recourse to arbitration or judicial proceedings depending on the nature of the dispute are evaluated in line with established jurisprudence. Decisions of the Court of Cassation and the Regional Courts of Appeal, in particular, demonstrate that judgments should be rendered in such disputes to establish justice by maintaining a balance between the parties. Consequently, when conducting such evaluations, not only Turkish law but also the foreign legal system chosen by the parties and international treaty norms must be duly considered.

Provision of Legal Consultancy under FIDIC Contracts for International Construction and Engineering Projects: FIDIC (Fédération Internationale Des Ingénieurs-Conseils) contracts are among the most widely applied contract types in international construction law, meticulously regulating not only technical details but also contractual obligations. Consequently, the drafting and interpretation of these contracts necessitate not only engineering knowledge but also a legal opinion process. As repeatedly emphasized by both the Court of Cassation and the Regional Courts of Appeal, discrepancies in engineering contracts typically arise from conflicts between administrative specifications and the contract text, and such disputes can be resolved through provisions drafted based on the parties' intentions. When FIDIC conditions are correctly applied, legal stability is ensured between parties in construction projects, and consequently, risk management becomes more effective.

Drafting of Contracts for the Protection of International Trademark, Patent, and Intellectual Property Rights, and Legal Evaluation of Infringement Cases: Intellectual property rights constitute one of the most frequently infringed areas in cross-border trade. The drafting of contracts in accordance with international instruments such as WIPO conventions and the TRIPS Agreement for international trademark and patent protection is imperative, particularly in technology transfer, licensing agreements, and distributorship relations. Consequently, the resolution of infringements in this domain is addressed not only in national courts but also through international arbitration and mediation channels. Decisions of the Constitutional Court have established that intellectual property should be considered within the scope of property rights, and the ECHR has developed consistent jurisprudence in this direction. In this context, contracts prepared by the law firm both expand the scope of protection and enhance predictability for the parties.

Establishment of a Legal Framework for International Electronic Commerce Transactions and Provision of Information on Data Protection Obligations: In international transactions conducted electronically, both e-commerce regulations and provisions concerning the protection of personal data are of critical importance. Accordingly, considering the cross-border nature of data flow, these transactions must be brought into compliance with GDPR, KVKK, and other relevant regulations. The Council of Europe's Convention No. 108 is, in this sense, an important instrument to which Turkey is also a party and which needs to be integrated into domestic legislation. Consequently, the establishment of a legal framework enables parties to conduct commercial activities without breaching their obligations. Should these obligations not be complied with, sanction risks arise, and companies may face severe administrative penalties. Therefore, a detailed examination and consultancy service minimizes the likelihood of future infringements.

Provision of Legal Consultancy for the Establishment, Mergers, and Liquidations of Companies with Foreign Partnerships:
The establishment process for foreign-capitalized companies involves more complex legal procedures compared to other commercial enterprises. Both Commercial Registry practices and regulations concerning foreign-sourced capital must be interpreted carefully. Furthermore, in merger and liquidation transactions, the statutory obligations of foreign partners must be fully discharged. Decisions of the Regional Courts of Appeal emphasize that the formal completion of these transactions alone is insufficient; the transaction must also be subject to scrutiny regarding public policy and creditor rights due to its nature. Consequently, legal consultancy provided in this context both ensures the desired outcome for the parties and enables the prevention of future disputes.

Provision of Legal Evaluation and Compliance Services in International Capital Market Transactions:
The international integration of capital markets enables investors to trade on different national stock exchanges; this, in turn, necessitates harmonization among the legislations of various jurisdictions. In initial public offerings (IPOs), issuance of debt instruments, or derivative product transactions by companies, it is imperative that the legal framework in question is clearly delineated. European Union capital market directives and IOSCO principles are considered at this point; Turkish legislation largely complies with these standards. Judicial jurisprudence indicates that in cases of infringements such as market abuse and insider trading, criminal and administrative liabilities arise. Therefore, legal compliance services are crucial not only with respect to the regulatory framework but also for risk management.

Provision of Legal Consultancy on Credit Agreements, Letters of Guarantee, and Reciprocal Obligations in International Banking Transactions: Interbank credit relations, letters of guarantee, letters of credit, and other guarantee instruments are frequently utilized in international financial transactions. As such, in the drafting and implementation of these documents, ICC regulations such as URDG and UCP must also be taken into consideration. Furthermore, a detailed examination of the validity and enforceability of these documents under the Turkish legal system is imperative. If clear provisions are absent in collateral agreements, significant disputes may arise during debt collection. Consultancy provided in this context ensures a holistic evaluation of both Turkish law and international financial customs.