Foreigners and force-majeure insurance clauses in Turkish contracts
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Introduction: The Growing Importance of Force-Majeure in Turkish Insurance Law
In today’s globalized economy, force-majeure clauses have become a vital element in Turkish insurance and commercial contracts, especially for foreigners conducting business in Turkey. Whether in construction, real estate, energy, maritime, or manufacturing, unforeseen events such as earthquakes, pandemics, wars, or government restrictions can significantly disrupt contractual performance. For foreign investors and policyholders, understanding how force-majeure insurance clauses function under Turkish law is crucial to minimizing risk and ensuring compensation in times of crisis.
Force majeure (“mücbir sebep”) refers to extraordinary circumstances that are beyond the control of the parties, preventing them from fulfilling their contractual obligations. Turkish law does not provide a single codified definition; instead, it is shaped through court precedents, the Turkish Code of Obligations (TCO), and insurance law principles.
For foreigners, especially those insured in Turkey, force-majeure clauses are often the difference between full protection and uncompensated losses. The Fırat Fesih Kaya Law Firm frequently represents foreign entities and individuals seeking to interpret, negotiate, or enforce force-majeure provisions within Turkish insurance frameworks.
1. What Is Force-Majeure Under Turkish Law?
Force majeure in Turkish law refers to an unforeseeable and unavoidable event that makes performance of an obligation impossible. The Turkish Code of Obligations (Law No. 6098, Article 136) provides the general rule that if performance becomes impossible due to a cause not attributable to the debtor, the obligation is extinguished.
Typical examples include earthquakes, floods, wars, terrorism, pandemics, and government-imposed restrictions. In insurance contracts, these events trigger policy clauses that define the insurer’s liability and the insured’s rights.
FAQ
Q1: Does Turkish law define force majeure explicitly?
No, but Article 136 of the Turkish Code of Obligations provides its legal foundation, supported by court interpretation.
Q2: Are natural disasters always considered force majeure?
Generally yes, unless the event was foreseeable or preventable in that specific business context.
Q3: Do insurers automatically cover all force-majeure events?
No. Only if the event falls within the policy’s explicit coverage.
2. How Force-Majeure Clauses Affect Insurance Coverage for Foreigners
For foreign businesses operating in Turkey, force-majeure clauses often determine whether insurance will compensate losses caused by uncontrollable events. Turkish insurers typically exclude “acts of God” unless specifically covered in “all-risk” or “catastrophe” policies.
Foreign policyholders should pay close attention to contract wording — many force-majeure clauses shift risk back to the insured unless expressly insured. Thus, before signing a contract or policy, foreign investors should have these clauses reviewed by a qualified Turkish lawyer.
FAQ
Q1: Are pandemics covered under Turkish insurance policies?
Some policies now include them post-COVID-19, but earlier contracts often excluded epidemics.
Q2: Can a foreign investor modify force-majeure clauses?
Yes. Contractual terms are negotiable under Turkish law.
Q3: What if the insurance company denies coverage due to force majeure?
You can file a bad-faith insurance claim or initiate mediation before litigation.
3. The Role of Yargıtay (Turkish Supreme Court) in Interpreting Force-Majeure Clauses
The Turkish Supreme Court (Yargıtay) has developed extensive case law clarifying the scope and consequences of force majeure. Courts assess three conditions: unforeseeability, unavoidability, and impossibility of performance.
In several decisions, Yargıtay confirmed that insurers cannot deny payment when the insured event falls squarely within a defined force-majeure scenario. For instance, in Yargıtay 11th Civil Chamber, 2017/2150 E., 2018/3349 K., the Court ruled that an earthquake, though catastrophic, was a foreseeable risk in a region with historical seismic activity — thus, it required explicit coverage.
FAQ
Q1: Are Yargıtay decisions binding on insurance companies?
Yes, they are authoritative precedents for lower courts.
Q2: Can foreign judgments on force majeure be enforced in Turkey?
Yes, subject to Law No. 5718 on international judgment recognition.
Q3: Do courts favor insurers or insureds?
Generally, Yargıtay interprets ambiguous clauses in favor of the insured.
4. Common Force-Majeure Clauses in Turkish Insurance Contracts
Force-majeure provisions in Turkish contracts often list events such as:
- Natural disasters (earthquakes, floods, fires),
- Political instability or war,
- Government acts or embargoes,
- Pandemics or public health emergencies,
- Labor strikes or supply chain disruptions.
For foreigners, these clauses must be carefully reviewed in English and Turkish, ensuring there is no translation discrepancy or hidden exclusion.
FAQ
Q1: Are English-language contracts valid in Turkey?
Yes, but a Turkish translation is required for enforcement.
Q2: Can a force-majeure clause excuse late performance?
Only if the delay results directly from the uncontrollable event.
Q3: Should foreign companies draft bilingual contracts?
Yes, to avoid disputes over interpretation.
5. The Impact of COVID-19 on Force-Majeure and Insurance Claims
The COVID-19 pandemic dramatically reshaped the interpretation of force-majeure clauses in Turkey. While some insurance policies excluded pandemics, Yargıtay and lower courts have since acknowledged government-imposed lockdowns as valid force-majeure events under certain circumstances.
Foreign investors who suffered losses in real estate, tourism, and energy sectors often faced insurer denials, leading to mediation and court actions. The precedents that emerged emphasize careful drafting and negotiation of force-majeure and insurance terms.
FAQ
Q1: Did Turkish courts consider COVID-19 force majeure?
Yes, particularly when government restrictions made performance impossible.
Q2: Are pandemic-related losses covered automatically?
No. Coverage depends on the wording of the insurance policy.
Q3: Can foreign claimants reapply for compensation?
Yes, especially if new case law supports broader coverage.
