IS CORONAVIRUS A FORCE MAJEURE EVENT UNDER YOUR COMMERCIAL CONTRACT? (MARCH 2020)

Since the definition and principles of force majeure are not stipulated in Turkish legislation, doctrine and Supreme Court precedents set the framework for the scope of implementation. In the recent decision of the Civil General Assembly of the Supreme Court (The decision of the General Assembly of the Civil Supreme Court dated 27.06.2018 numbered 2017/11-90 E. 2018/1259 K.), the force majeure is stated as an extraordinary event which occurs reasonable control, which, which cannot be predicted and resisted. The criteria agreed by Supreme Court to consider an event as force majeure are as follows:

  • The force majeure event should be a forcible event. This event can be a natural disaster, social or legal event, or it is possible to be a human-related event.
  • The event that constitutes force majeure should take place beyond the reasonable control of the parties,
  • The breaching party due to force majeure should be in failure of his/her contractual liability.
  • Such breach cannot be preventable even though all measures are taken, and
  • It should not be predictable for the contractual parties on conclusion date of the contract or if so, the adverse impacts of such event cannot be considered.

In addition to above criteria as per the related Supreme Court decision, it must be underlined that the existence of force majeure shall be evaluated individually as per features of each case, i.e. contractual relationship between parties, the effect of force majeure in the country.

As of today, there is neither official announcement stating that coronavirus, which affects the whole world and has been placed in “very high risk” category as a red alert by the World Health Organization, constitute a force majeure event in Turkey, nor a court decision has rendered yet thereof. Nevertheless, the Coronavirus pandemic which has global spread, has already   prevented highway, air and sa transportation between countries and between cities locally in Turkey, which caused suspension of the activities and loss of workman power of in many business areas all around the world must be evaluated as a force majeure event.

As a conclusion, although it is on the agenda of the whole world, it is not possible to foresee the adverse effect of coronavirus on contractual relations in current situation and to make a clear comment on whether it can be considered as force majeure or not, as coronavirus is a very new issue and there is no court decision rendered regarding this matter yet. 

However, we agree that the Covid-19 epidemic must be evaluated as a force majeure event under the above mentioned decision (criteria) of Supreme Court, doctrine and the worldwide adverse impacts of Coronavirus. Otherwise, provisions of Article 138 and the rest  articles re. “impossibility of performance” of Turkish Code of Obligation may be applicable in terms of debtor whether implementation of the contract due to an extraordinary situation can be claimed or not provided that such claim shall be subject to proof.