With the coronavirus pandemic affecting the whole world taking effect in Turkey as well, trading companies and commercial enterprises were faced with substantial economic and financial risks.
Due to the coronavirus outbreak, it is thought that companies may face with a great deal of problems starting with inconveniences in productive activities and supply chain, disruption in cash flow, failure to fulfil obligations arising from previously signed contracts.
Turkish Law states, it is possible to determine a condition or an event to be force majeure explicitly in the contract signed between the parties. However, in the cases there is not any force majeure regulations within the contract, force majeure claim can be asserted according to general provisions.
Even though Turkish Law does not provide a legal definition for force majeure, according to the Turkish Supreme Court judgements and the opinions expressed in doctrine, for an event which was not determined as force majeure in the contract to be considered as force majeure if;
- The event shall arise beyond the control of the parties,
- Occurrence or the consequences of the mentioned event shall be unforeseeable for the parties,
- Prevention of the event shall be beyond the control of the parties,
- The mentioned event shall cause the impossibility of fulfilment of the obligations of the parties despite the precautions taken.
Since it should be evaluated in terms of each concrete event whether the situation arising from coronavirus pandemic constitute a force majeure event or not; first, it has importance to confirm the existence of the above-mentioned conditions of force majeure.
Considering all these conditions, it can be seen that the Covid-19 epidemic caused by the corona virus corresponds to with the “General Force Majeure Cause” concept, whose conditions are determined in the doctrine. However; even if it is accepted that coronavirus pandemic is a force majeure event within the scope of objective conditions, it is essential to evaluate if it represents an obstacle regarding the fulfilment of the obligation within the scope of each contract and legal relationship. The most important event to be considered regarding such evaluation is whether the causal relation between the pandemic and the obligation subject to the contract exists.
While evaluating whether an event constitutes a force majeure, the causal relation between the force majeure in question and the impossibility of the performance of obligations should be determined in each concrete event. The regulation that should be taken into consideration while determining this connection is undoubtedly the good faith principle regulated in the 2nd article of the Turkish Civil Code. According to this provision, every person, must act in good faith while exercising their rights and performing their obligations.
Accordingly, in cases where the performance of the obligations is not fulfilled for a reason that the corona virus epidemic does not directly or indirectly affect, relying on the force majeure shall constitute a contradiction to the rule of honesty.
If there is not any relation between the coronavirus pandemic and performance of the obligations or the related party is in a condition that he/she can perform his/her contractual obligations despite the pandemic, in this case the existence of the force majeure cannot be brought up and the related party shall be responsible to bear the legal consequences of not duly performing obligations.
The coronavirus pandemic which has affected the business life as it did the whole world, provides the objective conditions to constitute force majeure under Turkish law. However, for this pandemic to be evaluated as a force majeure, it should satisfy the subjective condition as well with constituting a situation which makes it impossible to perform the obligations arising from the contract. In this context, while evaluating the corona virus as a force majeure in Turkish law and determining the subjective conditions, the arrangements included in the contract, the trade relationship between the parties, the foreign element, the quality of the acts should be evaluated carefully, and the corona virus epidemic should be evaluated in all circumstances. It should not be concluded that it will cause. In other words, a merchant cannot terminate the contract or request an improvement in the terms of the contract by opening an adaptation case due to the force majeure just because his pandemic has been broken and he has difficulty in payment / performance.
Consequently, it is necessary to accept a major pandemic of this scale as a force majeure whether there is a related article in the contract or not. However, in order for that an enterprise to terminate the contract based on this, or to file an adaptation case based on Article 138 of the Law on Obligations No. 6098, an evaluation should be made separately in the sector and concrete case in which the enterprise is connected. The policy of the courts is our biggest guide to evaluate the issue, and it is very important to follow the decisions they will make in order to reach a reliable result.
To sum up; while evaluating if the coronavirus constitutes force majeure under Turkish law and determining the subjective condition; provisions and parties of the contract, commercial relation between the parties, element of foreignness, characteristics of the performances should be carefully evaluated, it should not be concluded that coronavirus pandemic would necessarily constitute a force majeure in all circumstances.
Oyku Surer Kirci / Rengin Canli / Aline Mulino
Attorneys at Law / K&P Legal Law Firm