The choice of law, the choice of court and arbitration answer different questions in an international yacht contract. The chosen law affects the substance of the contract; the court or arbitration clause determines where a dispute will be resolved. Whether a foreign judgment or award can be enforced in Türkiye, and whether interim legal protection can be requested for the yacht, are assessed separately. A foreign flag alone does not settle all of these issues.
A Turkish buyer may take delivery in Türkiye of a yacht owned by a foreign company, repairs may be commissioned at a foreign shipyard, or parties from different countries may enter into a charter agreement. In such a relationship no single country is the only point of connection. The seller's country, the vessel's register, the place of delivery, the payment account and the location of the debtor's assets may all be in different states. The domestic-law side of a charter relationship can be reviewed in the article on yacht charter agreements.
Waiting until the day a lawsuit is filed to think about dispute resolution can lead to delay. Obtaining a decision from the court chosen in the contract, securing attachment in the country where the yacht is located and collecting from the debtor's assets are complementary but separate steps. This article explains mainly the legal assessment to be carried out from Türkiye; court and enforcement proceedings in other countries are examined separately under their own rules.
How Are the Foreign Element and the Subject of the Dispute Determined?
The first step is not simply to find out the flag of the vessel. The parties to the contract, their residence and places of business, the register, the place of performance, the payment arrangements and the source of the dispute are determined together. The company that issued the invoice and the owner of the yacht, or the person who signed the contract, may not be the same. The use of another group company's trade name does not automatically mean that the other company is the debtor.
The legal nature of each claim must also be separated. A claim to recover the sale price is a contractual claim; a claim of ownership or a mortgage is a matter of rights in rem; damage from an accident may be a tort or a carriage issue; and a claim for crew wages may arise from an employment relationship. A choice of law in a contract does not govern all of these relationships to the same extent. The rights of non-party third parties, such as an insurer, a bank or a vessel creditor, may also be subject to separate rules. Detailed problems arising from the sale itself are discussed in the article on yacht sale and purchase agreements.
For example, in a dispute over repair costs with a foreign shipyard, the contract terms are the starting point, while the validity of a mortgage recorded in the vessel's register may be examined under a different connecting rule. This example is hypothetical and does not describe the outcome of any particular file. The point is that a single contract file can raise several legal questions.
The practical starting file consists of the signed contract and its annexes, the register extract, representation documents, delivery and technical reports, payment records and notices. From the outset, it should be determined which language version of the contract prevails and into which text later amendments were incorporated.
How Is the Law Governing the Contract Chosen?
Under Article 24 of Law No. 5718 on Private International and Procedural Law (MÖHUK), contractual obligations may be subject to the law that the parties have expressly chosen. A choice that is clearly apparent from the contract or the circumstances is also taken into account. The parties may choose the law for the whole contract or for a part of it. However, ambiguous wording creates new disputes about which obligation is governed by which law.
If there is no choice of law, the rule is that the law most closely connected with the contract applies. The connection established by the law through the habitual residence or the relevant place of business of the party owing the characteristic performance, and the exception for a closer connection, are assessed together. For this reason, the conclusions that "if there is a Turkish buyer, Turkish law applies" or that "if the yacht is under a foreign flag, the flag law necessarily governs the sale" are not reliable.
The effect of a choice of law is not unlimited. Under Articles 5 and 6 of Law No. 5718, public policy and the directly applicable rules of Turkish law, as well as the special protective provisions for the relevant relationship, carry particular weight. Areas such as operating permits, customs or administrative sanctions are not matters the parties can freely change by private agreement.
Choosing foreign law does not mean that a Turkish court can never hear the case. A competent Turkish court may apply foreign law. Under Article 2 of Law No. 5718, the content of foreign law is investigated, and the parties may be asked to assist; the law also provides a separate solution for cases where the foreign law cannot be determined despite all research. Preparing an early explanation of the foreign law and reliable sources for it is therefore useful.
Are Ownership, Registration and Consumer Protection Subject to the Same Choice?
For rights in rem over sea-going vessels, the country-of-origin rule in Article 22 of Law No. 5718 applies. The Law takes as its basis the place of the register in which rights in rem over the vessel are recorded; where there is no such register, the port of berthing (bağlama limanı). Therefore, the law governing the price and warranty provisions of the contract may differ from the law governing the in rem effects of ownership or a mortgage.
When a yacht registered in a foreign register is sold, a contractual claim alone is not enough. The documents required by the register, the conditions of representation, the cancellation of existing entries and the transactions for the new owner should be planned together. The seller's obligation under the contract to undertake registration and the conditions under which the register accepts it are not the same thing.
If the buyer acts for purposes outside a profession or trade, consumer protection may arise. The high price of a yacht does not by itself remove consumer status. If the scope and conditions of Article 26 of Law No. 5718 are met, the minimum protection provided by the mandatory rules of the consumer's habitual residence continues to matter despite the choice of law. The article also contains exceptions for transport and certain foreign services contracts.
Special provisions also apply to employment and insurance relationships. The same contract clause therefore cannot be assumed to produce the same result for an investor, a holiday buyer, a captain and an insurer. When a dispute resolution clause is designed, the legal status of the parties and the areas requiring protection must be determined separately.
Does a Foreign Court Selection Affect Turkish Courts?
The international jurisdiction of Turkish courts is, as a rule, determined by the domestic rules on territorial jurisdiction (Article 40 of Law No. 5718). For a foreign court selection, Article 47 sets up a special arrangement for disputes arising from debt relationships that contain a foreign element. Conditions such as exclusive jurisdiction areas and proof of the agreement in writing must be examined.
Where a valid foreign court agreement exists, it is important whether the counterparty raises an objection to jurisdiction before a Turkish court and whether the foreign court considers itself to lack jurisdiction. The jurisdictions that Articles 44 to 46 protect for employment, consumer and insurance matters cannot be removed by agreement of the parties. Therefore, a foreign city named in a contract does not automatically eliminate all Turkish court options.
The chosen court must be identified clearly in the contract, including the country and a sufficiently specific judicial district. If one clause says "only the foreign court" and another says "all disputes are arbitrated", this may create a question of interpretation. If the parties reserve the right to apply to a court for certain interim measures or for assistance in arbitration, it should be clear that this is distinct from resolving the merits of the main dispute.
Costs of service abroad, translation, local representation and possible security for costs should be considered when the contract is concluded. For a foreign person who sues or enforces in Türkiye, the exemption from security based on reciprocity under Article 48 of Law No. 5718 may also arise. It cannot be assumed that being a foreigner always results in depositing the same amount of security.
How Is a Valid and Enforceable Arbitration Clause Drafted?
Arbitration requires an agreement that the dispute will be resolved by an arbitrator or arbitrators rather than by a state court. The foreign element and the application conditions in Articles 1 and 2 of Law No. 4686 on International Arbitration are assessed. Besides the foreign element and an arbitration seat in Türkiye, the selection of the legal provisions that will govern the arbitration may also matter in practice. Not every international contract is automatically subject to arbitration.
Article 4 of the MTK regulates the written form of the arbitration agreement; electronic communications and the other written forms specified in the law are also taken into account. An arbitration clause may be included in the main contract, or a separate agreement may be concluded. Whether a reference to a standard form makes the arbitration clause part of the contract is examined separately. Unsigned and unsent general terms should not be assumed to be known to everyone.
The arbitration clause should state clearly the scope of the dispute, the seat of arbitration, the institution or method for appointing arbitrators, the rules to be applied, the number of arbitrators and the language. The seat is the legal centre; it is not the same as holding the hearings physically elsewhere. Where necessary, the law applicable to the substance and the law applicable to the arbitration agreement are determined separately.
A claim that the main contract is void does not in every case make the arbitration agreement void as well. However, the existence of the intention to arbitrate, the signatory's authority, the arbitrability of the dispute and the status of parties who require protection are assessed separately. It is not appropriate to add a standard arbitration clause to every yacht sale without review.
Arbitrators' fees, institutional costs, technical expert examination, translation and attorney fees also play a role in the choice. Options such as a sole arbitrator or a tribunal, a documents-only procedure and an expedited procedure, where available, are evaluated according to the expected size of the dispute. It cannot be guaranteed that arbitration will in every case be cheaper, faster or fully confidential; the chosen arrangement and the facts are decisive.
Can a Yacht Be Attached in Türkiye When a Foreign Court or Arbitration Clause Exists?
The fact that the main dispute is heard in a foreign court or in arbitration does not by itself exclude temporary legal protection in Türkiye. Article 1356 of the TTK provides that, despite a clause choosing a competent foreign court or arbitral tribunal, precautionary attachment may be requested from the competent Turkish courts under the conditions of Articles 1354 and 1355. This does not mean that the contract clause is wholly void; the functions of deciding the merits and securing the claim are separate.
Not every yacht claim gives rise to a right of attachment. Whether the claim is one of the maritime claims listed in Article 1352 of the TTK, whether there is the correct connection between the vessel and the debtor, and the conditions of prima facie proof, security and jurisdiction are examined together. Where security is sought for the claim, the special regime for vessel attachment is not considered to be bypassed by an ordinary interim-measure request.
The Izmir Regional Court of Appeal, 17th Civil Chamber, in its decision dated May 2, 2024, E.2024/535, K.2024/939, assessed an objection to a precautionary attachment in a charter relationship that contained a foreign law and an arbitration clause. In the framework of the maritime claim and prima facie proof conditions, the decision rejecting the objection was found to be appropriate, and the appeal was dismissed on the merits. The decision does not show that an attachment will be ordered for every yacht claim; it shows that attachment may arise together with the conditions for arbitration and temporary protection.
After an attachment, the time limits for carrying out the decision, for objections and for supplementary steps should be followed separately. Documents and translations showing that a foreign arbitration file has been opened may be needed. It should not be assumed that ongoing negotiations or the counterparty's promise to pay suspend the statutory time limits.
Recognition and Enforcement of a Foreign Court Judgment in Türkiye
A foreign court judgment does not mean that a Turkish enforcement office can take every step directly. Articles 50 et seq. of Law No. 5718 provide for enforcement (tenfiz) of foreign judgments for their execution in Türkiye. Recognition, by contrast, concerns the acceptance of the decision's effect as res judicata or as conclusive evidence. Where the aim is the collection of money, seeking recognition alone may not be sufficient.
In enforcement, it is important that the foreign decision is final under the law of the state where it was given and that it is properly documented. Article 54 of Law No. 5718 contains conditions relating to reciprocity, the exclusive jurisdiction of Turkish courts, exorbitant jurisdiction in certain circumstances, conflict with public policy and the right of defence. The reciprocity subparagraph of the same article does not apply to recognition (Article 58).
A duly certified copy of the court judgment, a certificate of finality and certified translations should be prepared. If enforcement is sought only for part of the decision, the scope must be clearly stated. Payments already made and facts of performance should not be withheld. An enforcement action is not a second sale or repair claim opened to re-examine the entire underlying dispute with all the evidence.
As to jurisdiction ratione materiae, the regulation of the Court of First Instance under Article 51 of Law No. 5718 and the nature of the dispute are considered together; whether the civil or commercial court of first instance has jurisdiction is determined according to the concrete relationship. As to territorial jurisdiction, the debtor's residence or domicile in Türkiye is considered and, if neither exists, the alternatives set out in the Law. A foreign court judgment and a foreign arbitral award should not be assumed to have identical jurisdictional rules.
Foreign Arbitral Awards and the New York Convention
For a foreign arbitral award, the scope of the 1958 New York Convention and Türkiye's reservations are examined first. Türkiye has made reservations in respect of awards made in another contracting state and of relationships regarded as commercial under Turkish law. The United Nations depositary records show these reservations. Where the Convention does not apply, Articles 60 to 63 of Law No. 5718 and other relevant provisions are assessed separately.
Under Article IV of the New York Convention, the arbitral award, the arbitration agreement and the required certified translations are prepared. The finality review of a foreign court judgment should not be transferred automatically, in the same terms, to an arbitral award. The binding effect of the award and the grounds for its annulment or the suspension of its enforcement are assessed under the applicable regime.
Article V of the Convention regulates the grounds for refusal, such as the absence of a valid arbitration agreement, failure to give proper notice or an opportunity to present a defence, excess of authority, irregularities in the composition of the tribunal or in the procedure, and matters concerning the binding nature of the award. Arbitrability and public policy are examined separately. Not every difference in legal interpretation alone justifies a fresh review of the merits.
Setting-aside proceedings at the seat of arbitration and the enforcement process in Türkiye are not the same procedure. Article VI of the New York Convention may allow the postponement of the enforcement review and the requirement of security in a particular case. An application made by the debtor in one country does not show that all proceedings in another country are automatically stayed in every case.
If enforcement is sought in another country, that country's membership in the Convention, its reservations, its procedure and the debtor's assets are examined. Moving the vessel may affect the collection plan. For this reason, when choosing the place of dispute resolution, one should consider not only where the decision will be obtained but also which assets it will be enforced against.
Conclusion
An effective contract arrangement for an international yacht dispute plans together the applicable law, the forum, interim protection and the enforcement of the decision. A foreign flag or a single arbitration sentence does not replace this review. When the contract, the register, the representation and the payment documents are compared at an early stage, both jurisdictional disputes and the difficulties of collection after a decision can be anticipated.
Related articles: Inheritance of a yacht or boat through succession; Brokerage and commission in yacht sales; Precautionary attachment of a yacht; Employment rights of the captain and crew.
Frequently Asked Questions
If the yacht is under a foreign flag, must a lawsuit always be filed in a foreign court?
No. The flag alone does not determine court jurisdiction for all disputes. The type of claim, the parties, the jurisdiction or arbitration agreement and the relevant statutory connections are examined together. Details: How Are the Foreign Element and the Subject of the Dispute Determined?
Does choosing English law also mean choosing English courts?
No. A choice of law and a choice of court or arbitration are different things. A competent Turkish court may also apply foreign law. Details: How Is the Law Governing the Contract Chosen?
If there is an arbitration clause, can no precautionary attachment be requested in Türkiye?
A valid arbitration clause does not by itself prevent interim protection. The conditions of the TTK concerning maritime claims, jurisdiction, the connection between vessel and debtor, prima facie proof and security must also be met. Details: Can a Yacht Be Attached in Türkiye When a Foreign Court or Arbitration Clause Exists?
Can a judgment won abroad be enforced directly in Türkiye?
The recognition or enforcement conditions for a foreign court judgment are examined. For forced execution, such as the collection of money, enforcement is generally required; the decision and the certificate of finality must be prepared. Details: Recognition and Enforcement of a Foreign Court Judgment in Türkiye
Are the enforcement conditions for an arbitral award the same as for a court judgment?
No. The scope of application of the New York Convention and, where applicable, the provisions of Law No. 5718 on arbitral awards are assessed separately. The grounds for binding effect and refusal should not be forced into the same mould as for a court judgment. Details: Foreign Arbitral Awards and the New York Convention
Can I use a standard arbitration clause in every yacht contract?
Using the same clause without examining the legal status of the parties, the foreign element, arbitrability, representation, institution, seat and language may create uncertainty. There should be no contradiction between the main contract and its annexes. Details: How Is a Valid and Enforceable Arbitration Clause Drafted?
Sources and legal bases
1 — Law No. 5718 on Private International and Procedural Law, Ministry of Justice version, Articles 2, 5–6, 22, 24, 26, 40, 44–48 and 50–63; the content of Article 27 relating to labour relations is not used in this article.
2 — Law No. 4686 on International Arbitration, accessible part of the consolidated text, especially Articles 1–5. Access to the official legislation PDF was not available, so the accessible text of the law was used.
3 — Law No. 6102 on Turkish Commercial Code, Ministry of Trade version, especially Articles 1352–1356 and the continuing provisions on precautionary attachment.
4 — Izmir Regional Court of Appeal, 17th Civil Chamber, May 2, 2024, E.2024/535, K.2024/939, full text access. The access provider may require membership.
5 — 1958 New York Convention, United Nations original text, Articles I–VII; English section, PDF pp. 7–9.
6 — United Nations depositary record: parties and Türkiye’s reservations.