Since the COVID-19 coronavirus was first reported in Wuhan, China in December 2019, strict and unprecedented measures have been gradually imposed by governments around the globe to limit risks of contagion. On 11 March 2020, the severity of the phenomenon was emphasised by the World Health Organization (WHO)’s declaration of COVID-19 as a global pandemic. As circumstances continue to evolve, substantial business and operational disruptions are a cause of great uncertainty that now reigns in various sectors and trade relations around the world. The implications are particularly profound when it comes to performance of contractual obligations in view of COVID-19’s far-reaching socio-economic effects. In this context of a health crisis exacerbated by the unexpected nature of the outbreak, the main issue is whether parties to affected commercial contracts may invoke force majeure as an argument to justify for failure to perform their contractual obligations.
For contracts governed by Turkish law, the first observation to be made is that the concept of force majeure and its defining conditions are not explicitly provided in the Turkish Code of Obligations (TCO) (published in the Official Gazette dated 4 February 2011 and numbered 27836) (Law No. 6098). The Court of Cassation has come to clarify at various occasions what should be understood by force majeure and under which circumstances parties are entitled to rely upon this concept. Within the framework of the case law and legal doctrine, it can be said that force majeure is deemed to arise when a contracting party’s performance is materially affected by (i) an event beyond his reasonable control, (ii) the effects of which could not have been foreseen at the date of commencement of the legal relationship and (iii) avoided despite all appropriate measures being taken. Continue reading “Sponsored briefing: How to handle contractual disputes in the COVID-19 era”
