This was an appeal from a judgment of the Istanbul 43rd Regional Court of Appeal (24 September 2020, 2020/1533-2020/40) and a judgment of the Istanbul 17th Commercial Court of First Instance (17 December 2019, 2018/517-2019/507).

The insurer plaintiff asserted that refined linseed oil, insured under its policy, was loaded onto the Med Denizli, destined for China from Türkiye, under a bill of lading dated 24 November 2017. During transhipment at Singapore, leakage was discovered from the container, resulting in a total loss of cargo. Investigations attributed the leakage to rough handling under the carrier's responsibility. An expert report was prepared, and survey reports were compiled in Singapore and China. The plaintiff formally notified the defendants of the damage, claiming that the defendant, as the performing carrier, was liable. Legal proceedings were initiated to contest the defendants' objection to the registered debt collection, seeking to continue the collection and secure a ruling for at least 20% compensation for the denial of the debt.

The defendant argued that it acted solely as an agent in the contract. It was also noted that the contract designated the London High Court as the competent Court for dispute resolution and determined English law as the applicable law. The defendant stated that the plaintiff’s insured held the role of shipper and, without admitting liability, argued that both the performing carrier and the contractual carrier were jointly responsible for the damage. It claimed that it lacked active legal standing in this case and demanded the dismissal of the lawsuit, insisting on compensation for malicious prosecution against the plaintiff who unjustly initiated debt collection proceedings against it.

The Commercial Court of First Instance determined that the case involved a foreign element and was not under exclusive jurisdiction arising from a contractual relationship and that the conditions set in the bill of lading regarding jurisdiction and applicable law were valid and binding. Thus, the Court declared itself incompetent to adjudicate the substantive issues, leading to the procedural dismissal of the case.

The plaintiff appealed to the Regional Court of Appeal.

The Appellate Court ruled that the jurisdiction clause was valid, that the dispute did not arise from a matter exclusively within the jurisdiction of Turkish courts, and that there was no violation of public order. Therefore, the Court dismissed the plaintiff's appeal on substantive grounds.

The plaintiff appealed to the Supreme Court of Appeal.

Held: Appeal accepted.

The Supreme Court of Appeal held that the dispute involves an international element and that the jurisdictional clauses placed in the bill of lading, also referred to as ‘clause paramount’, need to be assessed under the Private International Law and Procedure Law (MÖHUK) and the Turkish Commercial Code (TCC). While parties can establish jurisdiction agreements in disputes involving international elements, according to art 47.1 of the MÖHUK, it is not possible to contract out of the exclusive jurisdiction of Turkish courts. The lawmaker has explicitly recognised this in art 54.1-b of the MÖHUK, which states that decisions by foreign courts on matters that fall under the exclusive international jurisdiction of Turkish courts cannot be recognised or enforced. In addition, pursuant to art 105.2 of the TCC, disputes arising from contracts made through the agents of foreign traders in Türkiye may involve a local agent, who can sue, or be sued, in its name or on behalf of its principal. The law explicitly invalidates any contractual terms that would result in a contrary outcome. From both the statutory regulations and the reasons stated by Parliament, it is clear that Turkish courts have exclusive international jurisdiction over disputes arising from contracts executed through the agents of foreign traders in Türkiye.

In this case, the dispute between the parties relates to a carriage contract conducted through the defendant’s agent in Türkiye, MSC Shipping Agency AŞ, and the bill of lading was issued by a local agent. Even though the lawsuit was filed against the agent by associating it with the place of residence of the overseas defendant, the clause paramount in the bill of lading that stipulated that disputes should be handled by a foreign court is invalid, as it cannot remove the exclusive jurisdiction of Turkish courts. Thus, the Court of First Instance’s decision to dismiss the case due to lack of jurisdiction was incorrect, and must be overturned in favour of the plaintiff. As a result, the plaintiff's appeal is accepted, the decision of the Regional Court of Appeal to dismiss the appeal is annulled and reversed, and the case file is to be returned to the Court of First Instance, with a copy of the decision sent to the Regional Court of Appeal.