Validity Of An Arbitration Agreement Made By An Unauthorized Representative

In Turkish law, for a representative to be able to enter into a binding arbitration agreement on behalf of a principal, they must be specifically authorized by the principal (Turkish Code of Obligations Article 504/3 and Turkish Civil Procedure Law Article 74). An arbitration agreement made by a specially authorized representative can only become binding with the approval of the principal. For example, the commencement of arbitration proceedings by the principal personally may indicate the granting of this approval.

In the case of a legal entity, there is no need for special authorization for its organ to make an arbitration agreement. However, if a legal entity is represented by a person other than its organ, such as an employee, that person must be granted the authority to enter into an arbitration agreement.