Can the terms of the insurance policy relating to the language of insurance affect the cover? – Assurance


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Turkish courts, respecting the autonomy of the parties, do not hesitate to apply the standard special clauses recognized in international practice which are incorporated in insurance policies.1 But their application was not entirely clear when these model clauses were drafted in foreign languages. This controversy was exacerbated following the promulgation of the Insurance Law no. 5684 (“Insurance Act”) in 2007.

The Insurance Law, art 11/5 provides that “[A]The insurance policy cannot contain any words other than those in Turkish. When drafting the insurance policy, it is essential to use the words recognized by the Turkish Language Institute corresponding to words in a foreign language “. However, the Insurance Act does not attach any explicit sanction to the violation of this provision, other than a regulatory fine to be imposed on the underwriting insurance company. In addition to the archaic substance and justification of the said provision, the fact that the Insurance Law did not provide for the sanction of the violation of this article was considered by the researchers as a major point of lack.

It should be noted that law no. 805 on the compulsory use of Turkish by commercial enterprises, promulgated in 1926 (“Law No. 805”), has already demanded that any contract be performed in Turkish. However, this requirement had not prevented courts from recognizing and applying special foreign language clauses incorporated into insurance policies. The Turkish court in 1977 ruled that the Institute’s standard TLO clauses written in English and attached to the disputed insurance policy should be considered valid. This was due to the usual international practice that such special English conditions are very often and directly inserted into hull insurance policies. Turkey, within the framework of this international practice, was no exception. The court justified why such insurance policy conditions cannot be avoided in accordance with Law no. 805 emphasizing that the insurance policy was executed in Turkish; and an attachment in English does not necessarily mean that the parties intended to perform a contract in English.2

In this context, the entry into force of the Insurance Law seems to have a rollback effect on the established and long-standing practice of Turkish courts. Indeed, the Turkish court, in 2016, approved a ruling that the English Yacht Institute clauses incorporated into a hull insurance policy were deemed void, and the insurance claim was accepted under the insurance policy, which has survived without its exclusions.3

It remains to be seen whether the change in position of the Turkish courts will gain ground. As a considerable number of academics have rightly pointed out thus far, the Insurance Act alone does not justify the invalidity of clauses drafted in English.[4] The court which rendered the sentence in 2016, for the sake of reasonable justification, should rather have referred to Law no. 805, which expressly provides that contracts drawn up in a foreign language cannot be interpreted in favor of the party who drafted the contract. It appears that the Court in 2016 found it easier to refer to the Insurance Act, although to the detriment of a consistent interpretation. Otherwise, the Court would be required to introduce a reasoning as to its departure from the practice to avoid a strict application of Law no. 805.

The enactment of the Insurance Law, for the above reasons, unfortunately overshadowed the debate on the archaism of Law no. 805 has become over time. The 1977 case law mentioned above had already given the first indications that Law no. 805 began to fail to meet contemporary needs of ever-changing business needs. Academics, since then, have spoken out to encourage courts to ignore the mandatory requirement to use Turkish in business contracts where possible. This is particularly the case in insurance practice, where large-scale insurance contracts are rarely executed without back-to-back reinsurance coverage. Academics have further shown the courts a way to do this by claiming that a party challenging a contractual provision written and agreed upon in a foreign language would most likely be in bad faith unless it was defrauded during the negotiation phase. .5

Courts in disputes which do not fall under insurance law and therefore outside the scope of insurance law tend to follow this path, asserting that a party who invokes the contract as the basis of his claims cannot invoke the nullity. due to the use of language in principle. In addition, the courts have sometimes restricted the scope of law no. 805, stipulating that the use of the Turkish language is only mandatory for transactions between two Turkish business enterprises.6 It is difficult to mention yet a consistent and reliable practice. When it comes to the practice of insurance, the Insurance Act is an additional hurdle that the courts have struggled to overcome.

In view of the evolution of Turkish case law and inconsistencies, it would be prudent for insurance and reinsurance companies that underwrite risks in Turkey to execute the Turkish version of the special clauses and exclusions standard with the English version.


1. Court of Cassation, 11e Civil Division; Case n °: 2018-3001, Decision n °: 2019-4565, of 18.06.2019.

Court of cassation, general civil chamber; Case n ° 2014-716, Decision n °: 2016-572, of 04.05.2016.

2. Kerim Atamer; Maritime law, 2017, p. 75, 76.

3. Samim Ãœnan, Turkish Commercial Code, Book Six: Insurance Law, Vol VI: Court Decisions, 2020, p. 422

4. Samim Ãœnan, Turkish Commercial Code, Book Six: Insurance Law, Vol VI: Court Decisions, 2020, p. 428, 429.

5. Pinar Çaglayan Atasoy, Construction and validity of smart contracts, 2021, p. 105, 106.

6. Istanbul Regional Civil Court, 12e Civil Division; Case n ° 2021/205, Decision n. 2021/185, 11.02.2021.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.


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