Attorney at Law
29 February 2016
Both political and economic relations between Turkey and Russia have been strained by downing of a Russian jet in the Turkey-Syria border on 24 November 2015. Bearing in mind the fact that Russia is the second biggest trader partner of Turkey, following Germany, such incident has more devastative impacts than it looks in terms of economic relations between Turkey and Russia. The tension between Turkey and Russia has seen its peak levels with the announcement of a package of economic sanctions, being effective as of 1 January 2016 and including bans of imports of some Turkish goods, by the Russian Government.
Besides major and negative effects of such incident on political and economic relations between Turkey and Russia, essential legal problems have also arisen, especially on the side of Turkish traders, selling raw materials and goods to their Russian counterparts. This has raised questions as to whether contracting parties have right to refrain from their contractual obligations or whether such contracts between the parties can be terminated unilaterally based on the assumption that the governing law in the contract is specified as Turkish Law and thus the Turkish party to such contract is not able to fulfill its obligations as a result of a force majeure event.
What is Force Majeure?
Although term of force majeure is not defined under the applicable Turkish legislations, article 136 of Turkish Code of Obligations numbered 6098 covers rules and principles applicable to supervening impossibility. In the case that performance of obligations becomes impossible due to occurrence of a force majeure event after the conclusion of the contract, the debtor will be discharged from its obligations under such contract. Notwithstanding such article, contracting parties generally insert a force majeure clause into the contract, enabling the debtor to refrain from its contractual obligations and granting right to both parties to terminate the contract unilaterally. Although lists of force majeure events can be seen generally in force majeure clauses of the contracts, such clauses are not drafted under the principle of numerus clausus. In other words force majeure clauses exemplify the major force majeure events, such as natural disasters, acts of god, acts of governments, strikes, but do not set a limit for the events, which can be defined as force majeure incidents.
Conditions of Force Majeure
In the light of the foregoing explanations, an event can be defined as a force majeure incident provided that (a) it took place due to an external event, (b) consequences of such external event is unforeseeable, (c) it is impossible to hinder occurrence of such external event, preventing performance of the obligations, (d) a causal link exists between the non-performance of the obligation and such external event.
Approach of the Turkish Court of Appeals to Import Bans
Import bans constitute force majeure events and can be categorized under acts of governments. Import bans have been subject to the decisions of the Turkish Court of Appeals for several times.
The conditions explained above shall be met in order for an incident to be interpreted as a force majeure event.
To conclude, it should be noted that, depending on the circumstances of each case, imposition of bans on import and export of goods, can be defined as force majeure events provided that the foregoing conditions are met. In such case the debtor shall be released from its obligations arising from the contract until impacts of such force majeure event cease.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.