NEWSLETTER-2017

157 ARBITRATION LAW clearly distinguished from the law applicable to the merits of the dis- pute. As per this article, the arbitration agreement is subject to the law determined by the parties to be applied to the arbitration agreement or, if there is no such determination, Turkish law will apply. Hence, if the underlying contract is subject to a law other than Turkish law, and the law applicable to the arbitration agreement is not separately determined, the arbitration agreement will not be effected by the law applying the underlying contract, and its validity will be directly sub- ject to Turkish law. Likewise, AIA, IranianArbitrationAct, Art. 33/1(b) regulates that the validity of an arbitration agreement is, firstly, subject to the law determined by the parties and, if there is no such determination, then Iranian law will directly apply to the arbitration agreement. Conclusion According to the principle of separability, the arbitration agree- ment and the underlying contract may be subject to different laws. However, if these two agreements are not clearly subject to different laws by the parties, applying two different laws on the basis of the principle of separability might contradict the will of the parties. In order to avoid this contradiction, in the event the law that is applicable to the underlying contract is determined by the parties, this law may apply to the arbitration agreement, as well. However, such solution cannot be accepted under Turkish law considering the clear provision of AIA, Art. 4/3.