34. FORM OF ARBITRATION AGREEMENT

JOINT MEMORANDUM^*

  The following is the Joint Memorandum, drafted by the undersigned experts, respectively, of the V … Company Limited of Hong-Kong and H … ve … … … Endüstrisi A.Ş. of İstanbul, Turkey, pursuant to an order by the High Court of Justice, Queen’s Bench Division, Commercial Court, in the arbitration claim between the above referred to parties.

The signatories have convened on 21^st June, 2013 and 11^th July, 2013, at the office of Prof. Dr. İlhan Helvacı and after going over the relevant documents in the file and discussing at length the legal issues involved in the conflict, have drafted this Joint Memorandum.

  I. THE ISSUES ON WHICH THE SIGNATORIES HAVE MUTUALLY CONCURRED

  1. That the agent must have specific power to enter into an arbitration agreement or insert arbitration clause in the contract, as the case may be, on behalf of the principal, as set out in paragraphs 36 - 40 of Prof. Dr. İlhan Helvacı’s report, as also referred to in paragraphs 35 - 37 of the report by Dr. … … .

2. As to form of the arbitration agreement:

a. Where the form of the arbitration agreement is subject to predecessor Code of Civil Procedure (no: 1086), the requirement that the arbitration agreement is “in writing” could be satisfied by an exchange of written communications between the parties (such as letter, telegram, telex, fax or through electronic means). However, (for example) the letter related to the arbitration agreement has to have the signature of his writer (or his representative).

The writer of the letter can use a hand written signature or a secure electronic signature because the former Turkish Code of Obligations accepts that the hand written signature or the secure electronic signature are the necessary elements of the form (TCO.art.13 and art.14).

b. Where the form of the arbitration agreement is subject to present Code of Civil Procedure, the requirement that an arbitration agreement should be made in writing would be satisfied provided such agreement was entered into either by a document bearing handwritten signatures of the parties or signed by using secure electronic signature or the arbitration agreement was incorporated into a correspondence, such as a letter, telegraph, telex or fax, exchanged between the parties or into an electronic media or the defendant does not raise any objections to the statement of claim which alleges the existence of an arbitration agreement (Par 3 of art. 412 of the present Code of Civil Procedure and as more amply described in par. 41 of the report by Dr. … …).

  II. THE ISSUES ON WHICH THE SIGNATORIES HAVE DIVERGING VIEWS ARE AS THE FOLLOWING:

  1. Prof. Dr. İlhan Helvacı, as already stated in his report (see paras. 43 et seq. and particulary par. 49), while concurring with the opinion of Dr. … …, that an agent must be specifically empowered to conclude an arbitration agreement or, insert an arbitration clause in the contract he has entered into on behalf of the principal, on the other hand and reiterating and confirming his opinion in par. 49 of his expert report, has expressly submitted that such power need not necessarily be given through a written document but on the contrary can be bestowed orally.

The focal point in this issue, according to Prof. Dr. İlhan Helvacı, is the means of proof as to whether the principal has in fact bestowed on the agent the power to conclude an arbitration or not and such dispute, therefore should be solved pursuant to the rules of evidence, the party claiming that the agent had the power to conclude an arbitration agreement or, as the case may be, insert an arbitration clause in the contract, would have to prove his allegation based on the relevant provisions of the Law of Evidence (see paras. 54 and 55 of the Expert Report).

Prof. Helvacı has, in the meantime, also referred to the views of the authorities in the field of Law of Contracts, as already quoted in footnotes 8 and 9 and 11 of his expert report ⁽¹⁾.

2. Dr. … …, while setting forth that power to conclude an arbitration agreement on behalf of the principal or inserting an arbitration clause into a contract, concluded on behalf of the principal, the agent must have special authority, however and differing from the view held by Prof. Helvacı, Dr. … … submits that, such power, to be valid, should have been conferred upon the agent in a written form signed by the principal. Otherwise, neither the arbitration agreement nor the arbitration clause shall be valid and shall not bind the principal.

Dr. … …, draws, mainly on the opinions, proposed by the authors Oğuzman / Öz as well as Yavuz ⁽²⁾.

3. Nevertheless, with regard to the views of Yavuz, the signatories point out that, while Dr. … … interprets the statements of this author as at least impliedly accepting that power to enter into arbitration agreement on behalf of a principal, the power of the agent must have been given in a written form; Prof. Helvacı does not share Dr. … …’s way of interpretation and is not of the opinion that statements by Yavuz can be understood as accepted by Dr. … … .

4. With regard to the reference in par. 76 of Prof. Dr. Helvacı’s report, made to Dr. … …’s comment in par. 42 of his report, Dr. … … expounded on the said statement and submitted that such proposition, by all means, included an arbitration agreement or an arbitration clause, as the case may be, signed by an agent, provided he is validly authorised.

5. For the avoidance of doubt Dr. … … has not addressed the issues of the law governing the question of the agent’s authority under art. 30 (2) of the Private International Law Act or ratification.