Av. Sevcen CAN & Av. Yasemin ÇORAK

In our previous article, we mentioned potential legal issues related to applicable law and jurisdiction (Please see…). In this article, we will explain the problems that may arise regarding the arbitration conditions in cloud computing contracts.

3) The Problems That May Arise Regarding the Arbitration Conditions

The parties (service provider and user) may include the arbitration clause in the contract for settlement of legal disputes that may arise from cloud computing contract, and they may determinethe arbitrators, the applicable law, the place of arbitration and its rules. It is frequently preferred by the parties to include arbitration clauses in the contracts, due to reasons such as insufficient legislative regulations regarding the issue or legal certainty problems.

In cloud computing contracts, parties may freely include arbitration clause if both are traders, but if one party is a consumer, such freedom cannot be mentioned.

The most preferred arbitration institutions in international trade are ICSID (International Centre for Settlement of Investment Disputes), ICC (International Chamber of Commerce), UNCITRAL (Unıted NatıonsCommıssıon On Internatıonal Trade Law), LCIA (London Court of International Arbitration) and AAA/ICDR (American Arbitration Association/International Centre for Dispute Resolution). As you see, there is no uniform legal system in international arbitration. Legal results depending on the place of arbitration have an important role in the parties’ choice of place of arbitration. Therefore, the rules of the arbitration intitutions should be well known and arbitration choice should be made on this basis.

In our next article, we will explain the potential legal issues related to nonliability clauses included in cloud computing contracts.

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