202004.05
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Assessment of Covid-19 Outbreak in Terms of Force Majeure under Turkish Law, Av. Kaan Turan DEMİR

Assessment of Covid-19 Outbreak in Terms of Force Majeure under Turkish Law

          Av. Kaan Turan DEMİR

I- Introduction

As the coronavirus disease (Covid-19) continues to affect business around the world, it is significant to underline key points regarding the current and ongoing impacts of the outbreak. Since the World Health Organisation (WHO) has declared on 30 January 2020 that the outbreak constitutes a Public Health Emergency of International Concern, the world countries have realised the seriousness of the outbreak. Shortly afterwards, many countries as well as the United Nations have started taking measures, including imposing flight bans, closing borders, imposing isolations and so on, in order to decrease spreading speed of the virus. Inevitable outcome of the measures was that the parties of commercial contracts, especially in terms of international trade, have faced with difficulties while performing their respective contractual obligations. Therefore, interpretation of commercial contracts has been one of major matters during this distressed period. In particular, force majeure related articles in commercial contracts and their interpretation under Turkish Law will be analysed in this writing.

II- The Notion of Force Majeure in Civil Law Systems

As it is known, interpretation of contracts varies due to many factors. However under the classification of Common Law and Civil Law, either codes or case law may help to get appropriate results. Civil Law countries mainly insert useful articles into codes, whereas Common Law countries mostly rely on case law and precedents. Hence, it is important to determine governing law of the contract. The governing law may even alter meanings of words.

Force majeure originates from Roman Law. This concept is widely recognised in civil law jurisdictions. Force majeure can be defined as occurrences which constitute an excuse that frees the parties from their liabilities and obligations arising from the contract. In this sense, force majeure has four main features, namely Externality, Unpredictability, Irresistibility and Impossibility. Each feature has great significance and must be taken into account while identifying whether the situations can be regarded as force majeure or not.

III- Interpretation of Force Majeure in Turkish Law

Turkey is a great example of Civil Law family. Therefore in order to grasp the situation in Turkey, there are two important items which must be scrutinised; the contract between the parties and the relevant codes.

Turkish Law allows the parties to draft the contract freely according to their wishes unless it is against the law, morality, public order and individual rights or it is impossible. This is called the principle of freedom of contract and, as can be seen, it is not unlimited. In this context, the parties may include an article regarding force majeure into the contract. In case there is such article, it will be applicable and the parties may resolve their disputes in accordance with the signed contract.

However, if the parties did not stipulate an article for force majeure situations and governing law is Turkish Law, it should be looked at the Turkish Code of Obligations No.6098. Even though the code does not provide a proper definition of force majeure, it draws a frame. Force majeure is identified in the code as extraordinary situations that cannot be foreseen by the parties at the time of the contract and do not depend on the parties. Actually, the code shows the same four elements mentioned above; Externality, Unpredictability, Irresistibility and Impossibility. Therefore, the current outbreak shall be deemed force majeure under Turkish Law for sure.

Next question to be answered is that what rights the code provides to the parties in case of force majeure. Related articles of the code basically give two rights to the parties, demanding revision of the contract and termination of the contract. But these legal regulations do not allow the parties to make independent decisions. The parties are obliged to go to court prior to using those rights. Hence, the law-maker aims to prevent abuse of force majeure situations.

IV- Measures taken in Turkey

The Turkish government has started taking necessary measures in Turkey. For instance, flight bans have been imposed currently to over 68 countries, some borders have been closed, execution and bankruptcy proceedings have been stopped until 30 April, trials to be held until 14 April have been adjourned, public institutions and organisations have been allowed for using flexible schedules and remote working if possible, the curfew has been announced for people who are over 65 or chronically ill.

V- Conclusion

As a result, the recent Covid-19 outbreak is regarded as force majeure under Turkish Law. If the contract between the parties does not contain an article regarding force majeure, they may fulfil their obligations by reserving rights. Reserving rights during performing duty or payment will enable the parties to go to court for damages occurred during the outbreak.

Therefore, the parties should take steps carefully until the outbreak is taken under control. Otherwise, they might be confronted unexpected and unwanted consequences.