e-book2013

NEWSLETTER 2013

186

arbitration clause from the underlying agreement has been accepted as a

principle which allows for arbitration proceedings related to an agreement

whose validity is put into question.

According to the separability principle, the invalidity of the underlying

agreement will not have an impact on the arbitration clause; likewise,

the invalidity of the arbitration clause will not render the underlying

agreement invalid. In other words, the requirements for validity of the

arbitration agreement may differ from those sought for the validity of

the underlying agreement. For instance, in Turkish law, a representative

may conclude a share purchase agreement on behalf of the principal and

this does not necessitate that the representative have specific authority

to do so. However, the same representative needs specific authority to

conclude an arbitration agreement on behalf of the same principal. In

such event, the provisions of the share purchase agreement concluded by

the representative will be valid, except for the arbitration clause, due to

lack of specific authority

Consequently, even if the underlying agreement is pronounced

invalid for any reason, the arbitration clause will remain valid; on the

other hand, if the arbitration clause is invalid, the underlying contract will

remain valid and the dispute arising from the underlying agreement will

be resolved before national courts.

Indeed, the arbitration clause and the underlying agreement are two

different agreements despite the fact that both exist within the same

text. While the underlying agreement creates a relationship of obligation

between the parties, the arbitration agreement solely addresses the

settlement of disputes between the parties.

Due toaforementioned reasons, theprincipleof separabilityestablishes

that the arbitration agreement and the underlying agreement have different

qualities; the arbitration agreement is juridically autonomous and shall

not be affected when the main contract is rendered invalid.

Nonetheless, this principle does not necessarily require that the

“fate” of these two agreements is always different. Certain reasons

invalidating the underlying agreement may affect the validity of the

However, this should be assessed on a case by case basis.