Reconsidering the Issues Regarding Validity of Arbitration Agreements Referring to Non-Existing Arbitral Institutions or Including Uncertain References to Arbitral Institutions and the Turkish Experience

Abstract

Arbitration agreements referring to non-existing arbitral institutions or including undefined references to arbitral institutions are significantly observed in international arbitration practice. Validity of such arbitration agreements becomes debatable due to the pathological intent thereof. If the pathology may be resolved by way of interpretation in the manner that leaves no room for doubt, the ideal solution is resolution of such problems by way of interpretation by means of supporting parties’ common intent towards arbitration and of protecting legitimate expectations of parties in compliance with bona fides principle. However, if interpretation of an undefined reference in an arbitration agreement leads to uncertainty about competence of certain arbitral institutions, such agreement aimed at institutional arbitration either may be accepted to be turned into an agreement aimed at ad hoc arbitration or may be held null-and-void, depending on position of law of seat of arbitration. If seat of arbitration is also undefined or non-existing, arbitration agreement shall be held incapable of being performed and null-and-void. Attitude of Turkish courts seems in conformity with the three approaches to a large extent and may be qualified as satisfactory but determining validity of such arbitration agreements without reference to any law applicable and disregarding the right of access to justice should be criticized.