International Sales Contracts and Arbitration Proceedings in Turkey

International sales contracts are essential to Turkey’s commercial relationships with Europe, Asia, the Middle East, Africa and the Americas. Turkish manufacturers, exporters, importers, distributors and trading companies regularly enter into agreements involving cross-border deliveries, foreign-currency payments, international transport, customs procedures and documentary payment mechanisms.

Although many international sales transactions are completed without serious difficulty, disputes may arise when goods are delivered late, products fail to satisfy contractual specifications, the buyer refuses payment, the seller cannot obtain export clearance, documents are rejected by a bank or an unexpected governmental measure prevents performance.

These disputes often involve parties established in different jurisdictions and assets located in more than one country. The contract may refer to Turkish law, the law of another state, the United Nations Convention on Contracts for the International Sale of Goods, commonly known as the CISG, or a combination of international and domestic rules.

The parties must also determine where and how their disputes will be resolved. International arbitration is frequently preferred because it allows them to select a neutral forum, appoint specialist arbitrators, determine the language of proceedings and obtain an award capable of international enforcement.

Türkiye acceded to the CISG on 7 July 2010, and the Convention entered into force for Türkiye on 1 August 2011. The CISG may therefore apply directly to qualifying contracts involving Turkish businesses unless the parties validly exclude or modify its application.

Where Türkiye is selected as the seat of arbitration and the dispute contains a foreign element, International Arbitration Law No. 4686 generally regulates the arbitration procedure. The law applies to foreign-element disputes seated in Türkiye and recognises cross-border movement of goods or capital as one of the circumstances establishing an international element.

This article explains the applicable law, CISG rules, contractual risk allocation, common international sales disputes, arbitration clauses, ISTAC proceedings, interim protection and enforcement of arbitral awards in Türkiye.

What Is an International Sales Contract?

An international sales contract is an agreement under which a seller undertakes to deliver goods and transfer the relevant proprietary or commercial rights, while the buyer undertakes to accept the goods and pay the agreed price.

The relationship becomes international where it contains cross-border elements, such as:

• The seller and buyer having places of business in different countries;
• Goods being exported from one country to another;
• Payment being made in a foreign currency;
• International transportation being required;
• Customs and import procedures being involved;
• A foreign bank issuing a letter of credit;
• The contract being governed by foreign or uniform international law.

An international sales transaction commonly consists of more than the principal sale agreement. It may also involve:

• A carriage contract;
• Marine or cargo insurance;
• A letter of credit or collection instruction;
• A distribution agreement;
• A customs brokerage agreement;
• Inspection and certification services;
• Storage and logistics contracts;
• Performance guarantees;
• Export-credit insurance.

The parties should ensure that these related arrangements are consistent. A conflict between the sales contract, letter of credit and transport documents may cause payment or delivery problems even where the commercial terms were initially understood.

The Legal Framework Applicable to International Sales in Turkey

The law applicable to an international sales contract connected with Türkiye may be determined by several legal sources.

The main sources include:

1. The CISG;
2. The law chosen by the parties;
3. Turkish conflict-of-laws rules;
4. Turkish mandatory rules;
5. Contractually incorporated trade usages, including Incoterms rules;
6. The express provisions of the contract.

The relationship between these sources must be examined carefully. A clause stating that the contract is governed by Turkish law may result in the CISG applying as part of Turkish law where the Convention’s requirements are satisfied.

A party wishing to apply Turkish domestic sales law instead of the CISG should not assume that a general choice of Turkish law automatically excludes the Convention. The contract should expressly state whether the CISG is included or excluded.

The CISG and International Sales Contracts in Turkey

The CISG was adopted in Vienna on 11 April 1980 and entered into force internationally on 1 January 1988. UNCITRAL describes it as a modern, uniform and balanced regime for international contracts for the sale of goods, intended to increase legal certainty and reduce transaction costs.

The Convention generally governs contracts for the sale of goods between parties whose places of business are in different states when its jurisdictional requirements are met.

The parties’ nationality is not decisive. The relevant consideration is ordinarily the location of their places of business and the legal connection of the transaction with CISG contracting states.

The CISG regulates important issues including:

• Formation of the contract;
• Offers and acceptances;
• Obligations of the seller;
• Obligations of the buyer;
• Delivery;
• Conformity of the goods;
• Inspection and notice;
• Remedies for breach;
• Damages;
• Passing of risk;
• Exemption for impediments beyond a party’s control.

The CISG does not comprehensively regulate every legal issue connected with an international sale. Matters such as the validity of the contract, authority of representatives, proprietary effects, security rights and certain limitation issues may remain subject to the applicable domestic law.

Can the Parties Exclude the CISG?

Yes. The CISG is based substantially on party autonomy.

The parties may exclude the Convention entirely or modify the effect of many of its provisions. However, the exclusion should be clear.

A clause may state:

“This Agreement shall be governed by the laws of the Republic of Türkiye, excluding the United Nations Convention on Contracts for the International Sale of Goods.”

Where the parties wish the CISG to apply, they may state:

“This Agreement shall be governed by the United Nations Convention on Contracts for the International Sale of Goods. Matters not governed by the Convention shall be governed by the substantive laws of the Republic of Türkiye.”

The second formulation is often preferable to a general reference to the CISG alone because the Convention does not resolve every issue that may arise from the transaction.

The parties should also distinguish between:

• The law governing the sales contract;
• The law governing the arbitration agreement;
• The procedural law resulting from the arbitral seat.

Choice of Law under Turkish Private International Law

Article 24 of Turkish Law No. 5718 on Private International Law and International Civil Procedure allows parties to choose expressly the law governing their contractual obligations. A choice that can be understood clearly from the contractual provisions or circumstances may also be valid. The parties may select the governing law for the entire contract or only part of it.

Where the parties make no choice, the contract is governed by the law of the country most closely connected with the relationship. For commercial contracts, Law No. 5718 uses the place of business of the party performing the characteristic obligation as a principal connecting factor, subject to a closer-connection exception.

In an ordinary sales contract, the characteristic performance will generally be the seller’s obligation to supply the goods. It may therefore be inferred that the seller’s place-of-business law will frequently become relevant where the parties have made no effective choice, although the complete circumstances may establish a closer connection with another country.

This uncertainty can be avoided through a clear governing-law clause.

Turkish Domestic Sales Law

Where Turkish domestic law applies to matters outside or excluded from the CISG, the Turkish Code of Obligations No. 6098 becomes relevant.

The Code was adopted on 11 January 2011 and published in the Official Gazette on 4 February 2011. It regulates sales contracts and general contractual matters such as formation, performance, default, damages, impossibility and adaptation.

Turkish domestic law may govern issues including:

• Contract validity;
• Authority and representation;
• Contractual penalties;
• Limitation periods;
• Set-off;
• Assignment;
• Interest, subject to applicable commercial rules;
• Matters outside the substantive scope of the CISG.

The applicable regime should be identified before submitting a claim. It is not sufficient merely to cite both the CISG and the Turkish Code of Obligations without explaining which legal instrument governs each issue.

Formation of an International Sales Contract

International sales contracts may be formed through a single signed document, an exchange of offers and acceptances, purchase orders, order confirmations, emails or electronic platforms.

Disputes may arise where the parties exchange inconsistent standard terms. The buyer’s purchase order may refer to the buyer’s terms and courts, while the seller’s confirmation refers to the seller’s terms and arbitration.

This situation is commonly called the battle of forms.

The tribunal may need to determine:

• Whether a contract was formed;
• Which terms were incorporated;
• Whether the arbitration clause became part of the agreement;
• Whether later conduct constituted acceptance;
• Whether the parties waived inconsistent terms through performance.

For significant transactions, the complete agreement should be signed by authorised representatives. Standard terms should be attached or delivered in an accessible form, and the principal contract should expressly incorporate them.

Seller’s Obligations under the CISG

The seller’s principal obligations include delivering the goods, providing the required documents and ensuring conformity with the agreement.

Contractual conformity may concern:

• Quantity;
• Quality;
• Description;
• Specifications;
• Samples or models;
• Packaging;
• Labelling;
• Technical standards;
• Regulatory compliance;
• Intended purpose.

Article 35 of the CISG is central to product-conformity disputes. UNCITRAL’s case-law digest confirms that conformity may include the contractually required quantity, quality, description and packaging and may also involve characteristics represented through a sample or model.

The contract should state technical and regulatory requirements clearly. A general expression such as “European quality” may not be sufficiently precise.

The parties may instead identify:

• Applicable national or international standards;
• Approved drawings;
• Chemical composition;
• Tolerance levels;
• Performance capacity;
• Shelf life;
• Required certificates;
• Packaging method;
• Labelling language;
• Import-country requirements.

A seller should not automatically be assumed to know every regulatory requirement in the buyer’s country. The buyer should communicate any unusual safety, labelling, certification or market-access requirement expressly.

Buyer’s Obligations

The buyer’s principal obligations include paying the price and taking delivery of the goods.

The contract should regulate:

• Currency;
• Payment date;
• Bank account;
• Documentary requirements;
• Payment security;
• Advance payments;
• Retention;
• Late-payment interest;
• Taxes and bank charges;
• Set-off rights;
• Consequences of non-payment.

International payment methods may include:

• Advance payment;
• Open-account payment;
• Documentary collection;
• Confirmed or unconfirmed letters of credit;
• Standby letters of credit;
• Bank guarantees;
• Escrow arrangements.

The seller should assess both contractual and credit risk. A favourable arbitration clause does not eliminate the possibility that the buyer will become insolvent or have no enforceable assets.

Incoterms Rules

Incoterms rules are standard international trade terms published by the International Chamber of Commerce. The current Incoterms 2020 edition contains 11 trade rules and entered into force on 1 January 2020. ICC explains that the rules allocate important delivery-related tasks, costs and risks between sellers and buyers.

Commonly used terms include:

• EXW;
• FCA;
• FOB;
• CFR;
• CIF;
• CPT;
• CIP;
• DAP;
• DPU;
• DDP.

The selected rule should include the named place or port and the applicable edition:

“FCA Seller’s Warehouse, Istanbul, Türkiye, Incoterms 2020.”

A reference only to “FOB Turkey” may be insufficient because it does not identify the port or precise delivery point.

Incoterms rules do not ordinarily determine every issue under the contract. They should not be treated as a substitute for provisions concerning:

• Transfer of ownership;
• Payment;
• Product conformity;
• Remedies for breach;
• Applicable law;
• Dispute resolution;
• Force majeure;
• Limitation of liability.

The parties should also use a term suitable for the relevant mode of transport. Some Incoterms rules are specifically designed for sea or inland-waterway transport, while others can be used for any mode.

Passing of Risk and Transfer of Ownership

Passing of risk determines which party bears the economic consequences if the goods are lost or damaged without responsibility being established against either party.

Transfer of ownership is a different legal question.

Risk may pass to the buyer under the applicable CISG rule or agreed Incoterms provision even though legal title has not yet transferred. Conversely, the seller may retain title as security after delivery.

The contract should address:

• When risk passes;
• When ownership transfers;
• Whether title is retained until full payment;
• Who must obtain insurance;
• Who may make a cargo-insurance claim;
• Which party bears unloading risks;
• Which documents evidence delivery.

A retention-of-title clause must also be examined under the law governing proprietary effects and the law of the country where the goods are located. A contractual choice of law may not by itself ensure that the security arrangement is enforceable against third parties or an insolvency estate.

Inspection and Notice of Non-Conformity

Inspection and notification are critical in CISG disputes.

The buyer is expected to examine the goods, or arrange for their examination, within the period required by the circumstances. Where the buyer alleges non-conformity, it must give the seller notice specifying the nature of the problem within a reasonable time after discovery or when it ought to have been discovered.

UNCITRAL’s CISG Digest explains that Article 39 requires sufficiently specific notice and provides an ultimate two-year period from actual delivery, unless inconsistent with a contractual guarantee period. Failure to provide the required notice may result in loss of the buyer’s remedies for non-conformity.

The contract should establish a practical inspection mechanism, including:

• The inspection location;
• The inspection period;
• Sampling methodology;
• Independent surveyors;
• Laboratory testing;
• Hidden-defect procedures;
• The required form of notice;
• Preservation of defective goods;
• Seller access for reinspection;
• Repair or replacement procedures.

A buyer should avoid sending a vague message stating only that “the products are bad.” The notice should identify the defect, affected batches, quantities, test results and requested response.

The seller should preserve evidence of production, quality control, packaging and shipment.

Late Delivery and Failure to Deliver

Delivery disputes may arise where:

• Goods are shipped after the contractual date;
• Only part of the order is delivered;
• Delivery occurs at the wrong place;
• Documents are incomplete;
• Customs clearance fails;
• The carrier refuses the cargo;
• A shipment is stopped by sanctions or export restrictions.

The legal consequences depend on the seriousness of the breach, the contract, the CISG and the buyer’s commercial purpose.

Time may be particularly important for:

• Seasonal goods;
• Perishable products;
• Replacement components;
• Production-line materials;
• Event-specific merchandise;
• Goods linked to a resale deadline.

The contract should state whether delivery dates are firm, whether partial shipment is permitted and whether the buyer must grant an additional period for performance before terminating the contract.

Fundamental Breach and Avoidance

The CISG distinguishes ordinary breach from fundamental breach.

A fundamental breach is generally one that substantially deprives the injured party of what it was entitled to expect under the contract, subject to the Convention’s foreseeability qualification.

Avoidance terminates the contract and is therefore a serious remedy. It should not be assumed that every delay or defect allows immediate cancellation.

The tribunal may examine:

• The seriousness of the breach;
• Whether the goods remain usable;
• Whether repair or replacement is possible;
• Whether the breach can be cured;
• The commercial purpose known to the seller;
• The value of the defective portion;
• Whether an additional period was granted;
• Whether avoidance was declared in time.

A party wishing to terminate should issue a clear notice identifying the contractual and legal basis. Merely refusing delivery or stopping communications may create uncertainty over whether the contract was validly avoided.

Remedies of the Buyer

Depending on the circumstances, the buyer may seek:

• Performance;
• Delivery of substitute goods;
• Repair;
• Price reduction;
• Damages;
• Avoidance;
• Interest;
• Recovery of reasonable mitigation expenses.

The availability of substitute delivery or avoidance generally requires a sufficiently serious breach under the CISG.

The buyer should preserve evidence of:

• Purchase price;
• Replacement purchases;
• Lost resale opportunities;
• Customer claims;
• Storage expenses;
• Inspection costs;
• Transport costs;
• Disposal or repair expenses.

A damages claim should distinguish direct losses from speculative or remote loss.

Remedies of the Seller

Where the buyer fails to pay or accept delivery, the seller may seek:

• Payment of the price;
• Acceptance of the goods;
• Damages;
• Interest;
• Avoidance;
• Storage and preservation costs;
• Loss caused by resale at a lower price.

The seller must also take reasonable steps to reduce avoidable loss. Goods should not be allowed to deteriorate unnecessarily where they can reasonably be stored or resold.

Where a replacement sale is made, the seller should document:

• The resale date;
• The market conditions;
• The identity of the replacement buyer;
• The resale price;
• Additional transport and storage costs;
• Efforts made to obtain a reasonable price.

Damages under the CISG

Article 74 of the CISG provides a compensatory damages framework covering loss, including loss of profit, caused by the breach, subject to foreseeability at the time the contract was concluded.

A claimant must ordinarily establish:

• Breach;
• Causation;
• The existence of loss;
• The amount of loss;
• Foreseeability;
• Reasonable mitigation.

Potential damages in an international sales dispute include:

• Price difference on a substitute transaction;
• Lost resale profit;
• Production interruption;
• Inspection costs;
• Storage and transport;
• Customer compensation;
• Disposal costs;
• Currency-related losses, where legally recoverable;
• Financing costs.

Lost-profit claims require reliable commercial evidence. Forecasts unsupported by past sales, confirmed orders or market data may be regarded as speculative.

Force Majeure, Hardship and Article 79 CISG

International sales may be affected by circumstances outside a party’s control, including:

• Export bans;
• Import restrictions;
• War;
• Embargoes;
• Sanctions;
• Natural disasters;
• Port closures;
• Governmental measures;
• Severe transport interruptions;
• Destruction of production facilities.

Article 79 of the CISG provides a limited exemption where failure results from an impediment beyond the party’s control that could not reasonably have been taken into account or avoided or overcome.

The exemption does not automatically terminate the contract or eliminate every remedy. Its consequences and duration must be analysed carefully.

A force majeure clause should regulate:

• Qualifying events;
• Notice;
• Evidence;
• Mitigation;
• Partial performance;
• Alternative sourcing;
• Suspension;
• Long-stop termination;
• Payment obligations;
• Allocation of increased costs.

Commercial difficulty, price increases or reduced profitability do not necessarily amount to force majeure. The contract should address hardship or extraordinary cost increases separately where the parties want a renegotiation or adaptation mechanism.

Currency, Inflation and Payment Risk

Foreign-currency transactions may generate disputes concerning:

• The contractual currency;
• Exchange rates;
• Conversion dates;
• Currency restrictions;
• Bank-transfer interruptions;
• Negative exchange-rate movements;
• Late-payment interest;
• Allocation of banking costs.

The contract should state whether payment must be made in the agreed foreign currency or whether local-currency payment is permitted.

Where an arbitral award is expected, the claimant should formulate the requested currency, interest commencement date and interest basis clearly.

The tribunal should not be left to reconstruct an incomplete payment mechanism after the dispute arises.

Arbitration of International Sales Disputes in Turkey

International commercial sales disputes are generally capable of settlement by arbitration because they concern contractual and monetary rights over which the parties may freely dispose.

Law No. 4686 applies where the dispute has a foreign element and Türkiye is selected as the seat, or where the law is otherwise validly selected under its provisions. It does not apply to disputes involving rights in rem over Turkish immovable property or matters outside the parties’ free disposition.

The parties may select:

• Institutional arbitration;
• Ad hoc arbitration;
• Istanbul or another city as the seat;
• Turkish or English as the language;
• A sole arbitrator or three-member tribunal;
• The governing substantive law;
• Rules for evidence and hearings.

The legal seat should not be confused with the location of hearings or the arbitration institution.

The Arbitration Agreement

Article 4 of Law No. 4686 requires the arbitration agreement to be in writing. The requirement may be satisfied by a signed document, an exchange of communications, electronic records or incorporation by reference under the statutory conditions. The arbitration clause is treated independently from the principal contract.

A sales contract should avoid uncertain language such as:

“The parties may apply to arbitration if they agree.”

A more effective clause states:

“Any dispute arising out of or in connection with this Agreement shall be finally resolved by arbitration.”

The clause should identify:

• Institution and rules;
• Seat;
• Language;
• Number of arbitrators;
• Governing law;
• Law of the arbitration agreement;
• Scope of covered disputes;
• Emergency and interim relief.

ISTAC Arbitration for International Sales Disputes

The Istanbul Arbitration Centre may administer international sales disputes where the parties have agreed to use the ISTAC Arbitration Rules.

ISTAC’s official model clause states that disputes arising out of or connected with the contract will be finally resolved under the ISTAC Arbitration Rules. It recommends that the parties add provisions addressing the seat, language, number of arbitrators and law governing the merits.

A model provision may state:

“Any dispute, controversy or claim arising out of or relating to this Agreement, including its formation, existence, validity, interpretation, performance, breach or termination, shall be finally resolved by arbitration administered by the Istanbul Arbitration Centre in accordance with the ISTAC Arbitration Rules.

The seat of arbitration shall be Istanbul, Türkiye. The tribunal shall consist of a sole arbitrator. The language of arbitration shall be English. The substantive law governing the Agreement shall be the CISG and, for matters not governed by the CISG, the laws of the Republic of Türkiye.”

The appropriate number of arbitrators should reflect the claim value and complexity. A three-member tribunal may be disproportionate for a straightforward unpaid-invoice dispute.

Commencing Arbitration Proceedings

The claimant ordinarily begins institutional arbitration by submitting a request for arbitration containing:

• Party information;
• The arbitration agreement;
• The relevant contract;
• A summary of the facts;
• Legal grounds;
• The amount claimed;
• Requested relief;
• Position on tribunal constitution;
• Supporting documents.

The respondent may submit jurisdictional objections, defences, set-off claims and counterclaims.

After the tribunal is constituted, it will establish a procedural timetable addressing:

• Statements of claim and defence;
• Document production;
• Witness evidence;
• Expert evidence;
• Hearings;
• Post-hearing submissions;
• Costs.

International sales cases may often be resolved primarily through documents. A hearing may nevertheless be necessary where there are disputed oral agreements, authenticity issues, technical defects or conflicting expert opinions.

Evidence in International Sales Arbitration

Important evidence may include:

• The signed sales agreement;
• Purchase orders;
• Order confirmations;
• Standard terms;
• Pro forma and commercial invoices;
• Packing lists;
• Bills of lading;
• CMR consignment notes;
• Certificates of origin;
• Inspection certificates;
• Customs declarations;
• Letters of credit;
• SWIFT records;
• Delivery receipts;
• Photographs;
• Laboratory reports;
• Emails and messaging records;
• Notices of defect;
• Replacement-sale documents;
• Accounting records.

The parties should preserve original electronic files and metadata where authenticity may be disputed.

A claimant should connect each document to a particular allegation rather than submitting a disorganised archive.

Expert Evidence

Experts may be required in disputes involving:

• Product quality;
• Chemical composition;
• Machinery performance;
• Food safety;
• Packaging;
• Market price;
• Lost profits;
• Currency loss;
• Industry standards;
• Foreign law.

A technical expert should explain the testing method, sample integrity, applicable standard and conclusions.

A damages expert should identify the factual assumptions and distinguish actual loss from projected loss.

Where goods are allegedly defective, inspection should occur before the products are destroyed, repaired or resold. The opposing party should ordinarily be given a reasonable opportunity to participate or arrange an independent examination.

Interim Measures and Asset Protection

A party may require urgent protection before the final award.

Potential measures include:

• Preserving defective goods;
• Preventing the disposal of evidence;
• Freezing assets;
• Securing receivables;
• Preventing the transfer of goods;
• Preserving documents;
• Protecting confidential information.

Article 6 of Law No. 4686 permits a party to seek an interim injunction or interim attachment from a Turkish court before or during arbitration without violating the arbitration agreement.

The tribunal may also grant interim measures unless otherwise agreed, but it cannot directly issue an order requiring compulsory state enforcement or binding a third party.

A court application will generally be more effective where a bank account, customs-held shipment, registry or unrelated third party must be bound.

The Arbitral Award and Challenges in Turkey

The tribunal may award:

• The unpaid price;
• Damages;
• Price reduction;
• Interest;
• Storage and transport costs;
• Contractual penalties where enforceable;
• Arbitration costs;
• Legal fees under the applicable rules.

Where Türkiye is the seat, an international arbitral award may be challenged only through the limited setting-aside mechanism under Law No. 4686.

The court does not conduct a full appeal on the merits. An award is not ordinarily annulled simply because the unsuccessful party believes that the tribunal misinterpreted the CISG or evaluated the evidence incorrectly.

Potential annulment grounds include:

• Invalidity of the arbitration agreement;
• Irregular tribunal constitution;
• Excess of jurisdiction;
• Material procedural violations;
• Violation of equality;
• Non-arbitrability;
• Conflict with Turkish public policy.

The statutory arbitration regime also contains a default one-year period for rendering an award unless the parties agree otherwise or obtain an extension.

Recognition and Enforcement of Foreign Arbitral Awards in Turkey

A foreign arbitral award does not automatically become enforceable against assets in Türkiye.

Recognition and enforcement may be governed by the New York Convention or Articles 60 to 63 of Law No. 5718.

Under Article 60, a foreign award that is final and enforceable or binding on the parties may be enforced in Türkiye. Article 61 requires the arbitration agreement, award and certified translations. Article 62 contains limited refusal grounds, including invalidity of the arbitration agreement, lack of notice, excess of jurisdiction, non-arbitrability and public policy.

The New York Convention similarly establishes an international framework for recognising and enforcing foreign arbitral awards and limits the grounds on which enforcement may be refused.

Before commencing arbitration, the seller or buyer should identify:

• Where the counterparty is incorporated;
• Where its assets are located;
• Whether guarantees exist;
• Whether the intended enforcement state is a New York Convention state;
• Whether interim security should be requested.

Winning an arbitration does not guarantee recovery where the debtor has no identifiable assets.

Common Mistakes in International Sales Contracts

Frequent mistakes include:

• Failing to state whether the CISG applies;
• Using an incomplete governing-law clause;
• Selecting an Incoterms rule without a named place;
• Confusing passing of risk with transfer of ownership;
• Omitting product specifications;
• Failing to regulate inspection and notice;
• Using inconsistent standard terms;
• Failing to coordinate the letter of credit with the contract;
• Using optional arbitration language;
• Naming an arbitration institution incorrectly;
• Failing to identify the seat;
• Ignoring sanctions and export-control risks;
• Failing to preserve evidence of delivery or defects;
• Commencing arbitration without investigating assets.

Many international sales disputes arise not because the parties failed commercially, but because their documentation did not reflect their actual expectations.

Practical Drafting Checklist

An international sales contract connected with Türkiye should ordinarily address:

• Full legal names and addresses of the parties;
• Authority of signatories;
• Description and quantity of goods;
• Technical specifications;
• Quality standards;
• Packaging and labelling;
• Delivery date and place;
• Applicable Incoterms rule and edition;
• Passing of risk;
• Transfer of title;
• Inspection;
• Defect notification;
• Price and currency;
• Payment method;
• Security and guarantees;
• Interest;
• Taxes, customs and bank charges;
• Force majeure;
• Hardship;
• Sanctions and export controls;
• Limitation of liability;
• Governing law;
• CISG inclusion or exclusion;
• Arbitration institution;
• Seat, language and tribunal structure;
• Interim measures;
• Notice addresses;
• Confidentiality;
• Enforcement strategy.

Frequently Asked Questions

Does the CISG apply to contracts involving Turkish companies?

It may apply where the Convention’s jurisdictional requirements are satisfied. The CISG entered into force for Türkiye on 1 August 2011.

Does choosing Turkish law exclude the CISG?

Not necessarily. The CISG forms part of the applicable legal framework in Türkiye for qualifying international sales. Parties wishing to exclude it should do so expressly.

Can the parties choose both the CISG and Turkish law?

Yes. They may designate the CISG for matters within its scope and Turkish substantive law for matters not governed by the Convention.

Are Incoterms rules the governing law of the contract?

No. Incoterms rules allocate specified delivery responsibilities, costs and risks. They do not replace a complete governing-law or dispute-resolution clause.

When must the buyer notify the seller of defects?

Under Article 39 CISG, notice specifying the nature of the non-conformity must be given within a reasonable time after discovery or when the buyer ought to have discovered it. An ultimate two-year period applies unless inconsistent with a contractual guarantee.

Can unpaid sales invoices be resolved through arbitration?

Yes, provided that a valid arbitration agreement covers the dispute. The seller may seek the price, interest, damages and recoverable costs.

Can arbitration proceedings in Turkey be conducted in English?

Yes. The parties may choose English as the language of international arbitration seated in Türkiye under Law No. 4686.

Can ISTAC administer an international sales dispute?

Yes. Parties may agree that their dispute will be resolved under the ISTAC Arbitration Rules. The clause should also specify the seat, language, number of arbitrators and governing law.

Can a party seek an asset-freezing order despite an arbitration clause?

Yes. Applying to a Turkish court for an interim injunction or interim attachment does not itself violate the arbitration agreement.

Can a foreign sales arbitration award be enforced in Turkey?

Yes. A qualifying foreign award may be enforced under the New York Convention or Law No. 5718, subject to the applicable procedural requirements and limited refusal grounds.

Conclusion

International sales contracts in Turkey operate within a combination of contractual terms, the CISG, Turkish private international law, domestic sales legislation, Incoterms rules and international arbitration law.

The CISG provides a uniform framework governing contract formation, delivery, conformity, inspection, notice and remedies. Its application should not be left to assumption. The parties should state expressly whether the Convention applies and identify the domestic law governing matters outside its scope.

The contract should define the goods, specifications, delivery obligations, Incoterms rule, payment mechanism, inspection procedure, risk transfer and defect-notification requirements precisely.

International arbitration can provide an effective method for resolving disputes involving Turkish sellers, buyers, exporters and importers. It offers neutrality, specialist decision-makers, procedural flexibility and international enforceability.

However, arbitration is only as effective as the agreement on which it is based. The arbitration clause must be written, mandatory and sufficiently detailed. It should identify the institution, seat, language, tribunal structure and governing law.

Once a dispute arises, the parties must act quickly. Goods and documents should be preserved, defects inspected, notices sent, losses documented and the counterparty’s assets investigated.

For sellers, the central risks are commonly non-payment, rejection of goods and buyer insolvency. For buyers, the principal risks include late delivery, non-conforming products, ineffective inspection and loss of remedies through inadequate notice.

A properly drafted international sales contract should therefore function not only as a record of the commercial bargain but also as a comprehensive risk-allocation and dispute-resolution system.

Legal Disclaimer: This article is provided for general informational purposes only and does not constitute legal advice. The applicable law and dispute-resolution mechanism depend on the parties’ places of business, wording of the contract, nature of the goods, governing-law clause, arbitral seat and intended enforcement jurisdiction. Transaction-specific legal advice should be obtained before concluding or enforcing an international sales contract.