Force Majeure: The Deadlocks Of Crisis And War

1.     Introduction: The Concept of Force Majeure in the Era of Global Crises

In the current global geopolitical and economic climate, various events that may render the performance of contracts impossible have gained strategic importance in terms of the sustainability of commercial relations. Globalization, by involving numerous countries in production and supply processes, has increased the impact of political shifts, economic crises, wars, and natural disasters on contracts. Within this complex structure, force majeure is defined as external events beyond the debtor's control that are unpredictable and impossible to avoid.

Events such as the Covid-19 pandemic, the Russia-Ukraine War, and the Palestine-Israel conflict are observed to have created devastating effects on supply chains. These crises trigger the contractual element of 'unavoidability' through consequences such as the severance of logistical lines and the prevention of access to raw materials. Particularly, the Russia-Ukraine war has redefined the criterion of irresistibility in international trade through energy costs and sanctions.

Considering current developments, events such as the closure of the Strait of Hormuz by Iran whether de facto or otherwise—paralyze commercial life, and force majeure clauses have ceased to be mere boilerplate provisions. These provisions, which have transformed into a strategic defence mechanism, now define the fine line between operational continuity and legal liability.

2.     Analysis of International Legal Instruments,

In international trade, common standards play a critical role in protecting parties from uncertainties arising from different national legal systems. Within this framework, the United Nations Convention on Contracts for the International Sale of Goods ('CISG'), the UNIDROIT Principles of International Commercial Contracts ('UNIDROIT Principles'), the Principles of European Contract Law ('PECL'), and the ICC Model Clauses stand out as the most important tools.

Regarding the definition of force majeure, Article 79 of the CISG prefers to use the concept of 'impediment' instead of the term force majeure. For the debtor to be exempted from liability for damages, it is essential that the impediment is beyond their control and was unforeseeable at the time of the conclusion of the contract.

The UNIDROIT Principles and PECL, on the other hand, create a broader field of protection in favor of the debtor by adopting the concept of 'hardship' instead of absolute impossibility. In particular, Article 6.2.2 of the UNIDROIT Principles grants the parties the right to adapt the contract in cases where performance is technically possible but has become excessively burdensome. This flexibility offers a fairer balance for merchants compared to rigid systems that require a condition of absolute impossibility.

The ICC 2020 Model Clauses ('Model Clauses') were prepared to bridge the differences between local legal systems and to increase certainty in international commercial contracts. The Model Clauses are structured both as a detailed 'Long Form,' which lists events that may constitute force majeure one by one, and a 'Short Form,' which contains only the essential provisions and is more limited in scope. The Model Clauses protect the parties' rights under international standards by clarifying the processes for suspending performance and exemption from liability for damages. While international standards outline this framework, the Turkish Court of Cassation's approach to force majeure in Turkish law contains its own unique dynamics.

3.     The Court of Cassation's Approach to Force Majeure During Crisis Periods

While the shocks caused by economic crises make it difficult for parties to fulfill their obligations, they also bring about a search for legal protection. The economic fluctuations frequently encountered in Türkiye necessitate the preservation of the balance between force majeure and the principle of pacta sunt servanda. In Turkish law, the concept of force majeure is shaped around the principle of the 'prudent businessman' through the precedents of the Court of Cassation and legal doctrine.

The Court of Cassation stipulates that the criteria of 'externality,' 'foreseeability,' and 'unavoidability' must coexist for an event to be accepted as force majeure. It is mandatory that the event is of a nature that does not require the debtor's liability and renders performance objectively impossible. However, not every economic difficulty or increase in foreign exchange rates is automatically accepted as force majeure; the merchant's obligation to act 'prudently' and the necessity to foresee routine fluctuations in the market are also considered.

The fine line between economic crises and force majeure is determined by the Court of Cassation through the distinction of 'commercial risk.' As a rule, the Court of Cassation does not consider circumstances such as insolvency or bankruptcy as force majeure, viewing them instead within the debtor's sphere of economic responsibility. For a crisis to be deemed force majeure, it is expected to paralyze the entire sector and create an unavoidable objective impossibility. Consequently, for a prudent businessman, factors such as exchange rate increases are generally not considered force majeure but may be evaluated as an 'unforeseen circumstance' (casus fortuitus) if the necessary conditions are met.

The strict approach of the Court of Cassation requires merchants to conduct far more careful risk analyses during the contract drafting stage. This equity-oriented stance requires the distribution of risk within the contract to be regulated not merely with general expressions, but with concrete data.

Fikret Eren defines force majeure as events occurring outside the debtor's sphere of activity and business, which are unforeseeable and unavoidable despite all precautions. According to Eren, such events eliminate the debtor's fault and may remove the liability arising from the non-performance of the obligation.¹

Similarly, Haluk Nami Nomer states that force majeure consists of events occurring outside the debtor's sphere of activity that are objectively impossible to avoid; he expresses that economic difficulties alone do not constitute force majeure and should, in most cases, be evaluated within the scope of commercial risk.²

On the other hand, unlike economic crises, war can be regarded in Turkish law as an absolute state of force majeure embodying the elements of externality and unavoidability. While economic crises are generally not considered force majeure as they lead to the debtor's 'insolvency' (subjective impossibility), war may render the performance of the obligation physically or legally impossible.

However, the Court of Cassation's 'prudent businessman' criterion is also examined specifically in the context of wars: war is expected to render the performance of the contract directly impossible (physical or legal impediment), and the force majeure claims of the contracting parties are evaluated particularly in terms of foreseeability. If a state of tension or conflict already exists in the region of performance agreed upon at the time the contract was concluded, it is accepted that the condition of unpredictability regarding force majeure has not been met. Indeed, in a 2024 decision of the 11th Civil Chamber of the Court of Cassation,³ since the Syrian Civil War had already begun at the time the protocol between the parties was signed, the Court of Cassation upheld the local court's rejection of the force majeure claim on the grounds that the condition of unpredictability had not been satisfied.

The unavoidability criterion of force majeure is also specifically examined regarding merchants who are deemed prudent. In a decision rendered in 2022,⁴ the 11th Civil Chamber of the Court of Cassation did not consider the cancellation of train services due to the Arab Spring as a force majeure event that would prevent the shipment of goods. In the reasoning of the decision, it stated that the parties had not stipulated how the performance subject to the contract would be transported; therefore, a prudent businessman could have carried out the shipment of goods to Syria via other available land or air transport vehicles.

Consequently, in current Court of Cassation practice, although logistical obstacles, economic embargos, and import-export bans resulting from war may be evaluated as force majeure, it is expected that the merchant was unable to foresee these risks at the time the contract was concluded or, even if they were foreseen, that they were absolutely impossible to avoid.

4.  Evaluation and Proposed Solutions

In international trade, acting as a 'prudent businessman' is the most fundamental strategy that ensures the survival of enterprises in times of crisis. Merchants have an obligation to take into account the global, economic, and political risks of the market in which they operate. This obligation directly affects the legal validity of force majeure claims to be asserted in the event of a dispute. Indeed, in today's world, a merchant must be able to reasonably foresee not only local but also global supply chain disruptions.

Accordingly, during the preparation process of commercial contracts, merchants should avoid cliché phrase and clarify—within the scope of the relevant national laws—which events will be considered force majeure based on the content and nature of the contract. Instead of listing only standard situations such as war, natural disasters, or economic crises, force majeure should be defined in the contract to cover the results created by all kinds of geopolitical, economic, and political events, such as the cessation of production. In addition, clarifying technical details, such as the distinction between regional and global events, is critical for determining the boundaries of liability.

On the other hand, to list the strategic steps that a party encountering force majeure should follow:

• Notification and Mitigation of Damages: The state of force majeure must be notified to the other party without delay, and all reasonable efforts must be made to prevent the increase of damages. Furthermore, rather than strictly adhering to formal service of process requirements in force majeure notifications, a more functional and clear notification obligation should be established between the parties.
• Adaptation of the Contract: A request for negotiation should be made immediately to re-establish the contractual balance under changed If one of the parties refuses to negotiate, an adaptation of the contract should be requested from the court without delay, in accordance with the legal system to which the contract is subject.
• Suspension of the Contract: Written consensus should be secured to halt performance and grant additional time during temporary impediments.
• Rescission and Termination: In cases where performance has become permanently impossible, the contract should be terminated without incurring any liability for

Particularly, when a prudent businessman encounters a force majeure event that prevents the fulfilment of contractual obligations, notifying the counterparty as quickly as possible and taking all possible measures to keep damages at a minimum will pave the way for the merchant to make subsequent requests, such as the adaptation or suspension of the contract.

In conclusion, a prudent management approach and contract texts that accurately define risks will minimize legal disputes as well as potential financial and operational risks. Viewing force majeure clauses as a form of contractual risk-allocation mechanism provides enterprises with significant protection during global crises. Enterprises taking swift and reactive actions in accordance with the law governing the contract after the occurrence of a force majeure event will ensure that damages are kept to a minimum.

 Footnotes

1 Eren, Fikret. Law of Obligations General Provisions. 26th Edition, Ankara: Yetkin Publishing, 2023

2 Nomer, Haluk Nami. Law of Obligations General Provisions. 19th Edition, Istanbul: Beta Publishing, 2023

3 Court of Cassation, 11th Civil Chamber, Decision dated 14.02.2024 and numbered 2023/3421 E., 2024/1062 K.

4 Court of Cassation, 11th Civil Chamber, Decision dated 22.03.2022 and numbered 2020/5274 E., 2022/2238 K.

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.