The Effect of the Arbitration Clause Incorporated in a Bill of Lading to Third Persons

The validity of the arbitration clause in a bill of lading (liner and/or charterparty bills of lading) under Turkish law governed by various Acts. Conditions for the validity of foreign arbitration agreements are; (1) The arbitration agreement shall be in writing. (2) The parties to the arbitration agreement shall be competent. (3) The arbitration agreement shall be valid under the law, which the parties have chosen. The condition for the arbitration agreement to be in writing can be achieved in two ways. One of them is insertion of the arbitration clause among other existing terms and conditions of the bill of lading and the other way is incorporation to a charterparty provided that a copy of the charterparty is handed over to the holder of the bill of lading. Due to the following reasons those terms and conditions, including arbitration clause, either inserted or incorporated properly are exempted from the examination brought by the Art. 20 of Turkish Code of Obligations; (1) By virtue of a bill of lading having the characteristics of negotiable instruments, (2) The infeasibility of examination of generalized transaction terms in contracts between merchants, (3) Freedom of contract and the principle of diligent businessman in commercial law, (4) Article 55/1 of Turkish Commercial Code and the issue of constituting unfair competition already regulated, (5) The privity of practical commercial and customary application compared to Turkish Code of Obligations, (6) The effect of the compulsory provisions regarding maritime law under Turkish Commercial Code.