• It is the spirit and not the form of law that keeps justice alive.
    Earl Warren

A LOOK INTO THE PRINCIPLES OF FORCE MAJEURE AFTER THE RECENT TERRORIST ATTACKS IN TURKEY

Yet another and latest concern for investors in Turkey is the terrorist attacks, which the country has, unfortunately, been suffering mostly in recent days due to the political disorder as it, among other significant issues, directly affects the economic environment and the efficiency of investments.
 
This has raised questions as to whether contractual parties can rightfully refrain from performing their contractual obligations or, even, whether such contracts can unilaterally be terminated with just cause based on supervening impossibility as a result of force majeure.

Although there is no statutory definition for force majeure under the applicable Turkish legislation, force majeure is covered under the principles applicable to objective supervening impossibility as regulated under Article 136 of the Turkish Code of Obligations.  According to said article, a debtor shall be released from its obligation if the performance of such obligation becomes impossible due to a reason which occurs after the signing of the contact and which is not attributable to the debtor. It is also commonly seen in contract drafting that parties are tempted to include a definition of force majeure events, which would enable the debtor to be released from its obligations as well as granting one or more parties to such contract the right to terminate, often linked to some time threshold whereby the contract may be terminated if the force majeure continues in excess of such threshold.  Acts of God, fires, natural disasters, accidents, acts of government, acts of terror, strikes or industrial actions are the most common examples of force majeure events covered under contractual definitions.
 
Whereas supervening impossibility would be caused due to a force majeure event, it could also occur due to an unexpected event (clausula rebus sic stantibus). Hence, it is worth making a distinction between a force majeure event and an unexpected event. A force majeure event can be explained as an external and extraordinary event beyond the control of everybody which objectively renders the performances under the contract impossible, such as an earthquake, terrorist attack, general strike etc. On the other hand, an unexpected event is an event beyond the control of the debtor that also objectively renders the performance of obligations impossible. For example, a fire occurred in the premises of the debtor despite all necessary precautions taken by the debtor to prevent such fire. In other words, an unexpected event cannot be prevented by the debtor despite all necessary precautions having been taken by the debtor, whereas a force majeure event cannot be prevented by anyone despite the necessary precautions taken in that respect.

In light of these definitions, whether or not defined under a contract, an event can be accepted as constituting a force majeure event provided that (i) it occurred due to an external event, (ii) it is not possible to prevent the occurrence of such external event which renders the performance of the obligation impossible, (iii) consequences of such external event is unforeseeable and (iv) there is a link of causation between the external event and the impossibility of performance. For instance, with regard to any investment related contract, a terrorist attack is clearly (i) an external event, (ii) the occurrence of which cannot be prevented by the parties and (iii) the consequences of which cannot be anticipated by the parties. As force majeure also requires (iv) a causal link before it can be invoked legitimately, the terrorist act must make performance impossible, say for instance with regard to delivery of goods or services to or out of a region suffering increased acts of terror, whereby acts of terror may create a disruption in the provision of the service by affecting delivery, targeting transportation vehicles, etc.

Finally, it should be noted that, although the occurrence of a force majeure event is sufficient to release the debtor from its obligations, depending on the facts of each case, such release may only be granted for the period of the existence of the force majeure event or may continue even after the effects of the force majeure event cease to have effect.
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