Revocation of an Arbitration Clause by a Jurisdiction Clause Agreement

Facts

This case concerns a dispute between company G. and company X. AG, which had concluded several sales contracts containing arbitration clauses. The parties then signed an out-of-court settlement agreement (the "Agreement") containing a jurisdiction clause granting jurisdiction to the courts of Istanbul.

Company G. seized an arbitral tribunal, which declared itself competent to hear the dispute despite the jurisdiction clause in the Agreement. Company X. AG then appealed against this interim decision of the arbitral tribunal.

Considerations

The Federal Tribunal ruled that the jurisdiction clause in the Agreement had replaced and rendered void the arbitration clauses in the sales contracts. Indeed, the Agreement had the purpose of settling in a transactional manner the disputes arising from the complex legal relationships between the parties. Accordingly, the claims arising from the sales contracts were cancelled and replaced by claims for a balance of accounts within the framework of this settlement.

Consequently, the Federal Tribunal considered that the arbitration clauses in the sales contracts had become void and had been replaced by the jurisdiction clause in…