Background
A Turkish public institution — a state economic enterprise (KİT) operating aviation infrastructure — procured an electronic-device insurance policy through a competitive tender. The resulting contract, valued at 79,500,000 TL, covered two tranches of equipment: devices worth approximately 608 million TL against a broad set of risks (including earthquake, terrorism, and sabotage), and devices worth roughly 4.47 billion TL against electronic-device and earthquake risks, for the period 1 January–31 December 2024. The total insured sum stated in the policy was 5,081,389,133.42 TL.
During the policy period, a CVOR (VHF Omnidirectional Range) navigation device at Kars Harakani Airport suffered damage — specifically a Sideband Generator, two Power Amplifiers, a Low Pass Filter, and an X-ray baggage-control unit failed. The insurer opened two claims files (Nos. 19918 and 22429) but paid only partial amounts of 109,778.73 TL and 51,670.32 TL respectively, applying underinsurance reductions of 81.21% and 55.92% on the basis that the declared insured values for each individual device were substantially below their actual replacement costs.
The plaintiff brought suit in Ankara 2nd Commercial Court of First Instance seeking the outstanding balance of 540,489.47 TL together with advance interest running from the dates of loss notification. The first-instance court found for the plaintiff and the insurer appealed to the regional appellate chamber.
The Court’s Holding
The 23rd Civil Chamber dismissed the insurer’s appeal on the merits (esastan red) and affirmed the first-instance judgment in its entirety. The decisive issue was the proper interpretation of Article 9 of the Electronic Device Insurance Technical Specification (ECSTŞ), which was incorporated by reference into the service contract (Article 8) and reproduced verbatim in the policy itself. That clause read: “For partial losses not exceeding the insured sum, the insurer shall pay the full invoice amount after repair.” The court held that this provision constituted an express contractual agreement between the parties to exclude underinsurance reduction for partial claims — a contractual arrangement that Turkish law permits — and that the insurer, having drafted and incorporated the clause into its own policy, could not unilaterally resile from it by invoking the general underinsurance rules.
The court rejected the insurer’s jurisdictional objection, ruling that because both parties are merchants, the venue clause in Article 37.1 of the contract designating Ankara courts as the competent forum is valid under Turkish civil procedure law. The insurer’s remaining grounds — including alleged failure by the insured to maintain protective devices, the need for fault analysis given electrical causation, a request to resolve conflicts between the expert opinion and the court-appointed assessor’s report, and arguments about the interest start date and the applicable interest type — were each examined and found without merit. The court noted that the risks the insurer attributed to the insured’s alleged neglect were themselves risks expressly covered by the policy. The decision is final (kesin) by virtue of the monetary amount, and no further appeal lies.
As a procedural footnote, the court returned the appeal filing fee and decision fee (totalling 11,232.21 TL) to the insurer pursuant to Law No. 4758, Article 19/6, because the insurer’s management had been transferred to the Savings Deposit Insurance Fund (TMSF) and it therefore qualified for fee exemption — but this exemption did not affect the substantive outcome.
Key Takeaways
- A contractual clause in a Turkish electronic-device insurance policy stipulating that partial losses will be indemnified at full invoice value (up to the insured sum) overrides the default statutory underinsurance pro-rata reduction; the insurer cannot later recharacterize the clause as merely addressing depreciation deductions.
- Where both policyholder and insurer are merchants (tacirler), a contractually designated exclusive venue clause — even one deviating from the insurer’s registered domicile — is enforceable under Turkish civil procedure law.
- An insurer that drafts and incorporates a technical specification into its own policy is bound by that specification’s terms; it may not selectively invoke statutory default rules that contradict agreed-upon policy language.
- Covered perils listed in a policy preclude the insurer from denying claims on the ground that the insured failed to prevent those very perils; such an argument is internally inconsistent with the scope of coverage sold.
Why It Matters
This decision reinforces a principle of particular commercial significance in Turkey’s public-procurement insurance market: when public institutions procure insurance through a technical specification process, the detailed terms embedded in those specifications — and incorporated by reference into the policy — carry full contractual force. Insurers who draft and issue policies on the basis of a government tender specification cannot, at claims stage, retreat to general insurance-law default rules that conflict with those specifications. The ruling provides a clear roadmap for public entities to enforce full indemnity clauses negotiated at the tender stage.
More broadly, the case illustrates the limits of the underinsurance (eksik sigorta) doctrine under Turkish insurance law: while the doctrine is a default rule protecting against moral hazard, it is not mandatory in partial-loss scenarios and can be contractually waived. Counsel structuring commercial or public-sector electronic-device policies in Turkey should pay close attention to technical specification language, as such clauses will be read as binding waivers of proportional reduction at the appellate level.