Background
The plaintiff, a public institution operating Kars Harakani Airport, procured an electronic device insurance policy from the defendant insurer for the calendar year 2024 (1 January – 31 December 2024, 366 days). The policy covered two tranches of equipment: devices valued at approximately 608.3 million TL insured against electronic device, earthquake, terror, sabotage, and related risks, and a larger tranche valued at approximately 4.47 billion TL insured against electronic device and earthquake risks. The total policy premium was 79,500,000 TL and the aggregate declared insured value stood at 5,081,389,133.42 TL.
During the policy period, equipment at Kars Harakani Airport suffered damage: components of a CVOR navigation device (one Sideband Generator, two Power Amplifiers, one Low Pass Filter) and an X-ray baggage screening unit sustained failures attributed to electrical causes. The insured submitted two separate claim files. The insurer paid only 109,778.73 TL on claim file 19918 and 51,670.32 TL on claim file 22429, asserting in each case that the declared insured value was materially lower than the actual replacement cost — an underinsurance ratio of 81.21% and 55.92% respectively — and applied the proportional-reduction rule accordingly. A balance of 540,489.47 TL remained unpaid.
The insured brought proceedings before the Ankara 2nd Commercial Court of First Instance, arguing that the insurer’s underinsurance deduction contravened the contract, the Electronic Device Insurance Technical Specifications (ECSTŞ) annexed to it, and the terms of the policy itself. On 15 December 2025 the first-instance court upheld the claim in full, ordering payment of the outstanding balance together with advance interest running from the respective dates of loss notification. The insurer appealed.
The Court’s Holding
The Ankara Regional Court of Appeal, 23rd Civil Chamber, dismissed the appeal on the merits pursuant to Article 353/1(b)(1) of the Code of Civil Procedure (HMK). The appellate court reasoned that Article 9 of the ECSTŞ — which had been incorporated verbatim into the policy — provided: “For partial losses not exceeding the insured sum, the insurer shall pay the full invoice amount in full following repair.” By agreeing to that clause, the parties had contractually displaced the statutory proportional-reduction rule that ordinarily applies in underinsurance situations. Because the losses in both claim files were partial and remained within the insured sum, the insurer was obliged to reimburse the complete assessed invoice amounts without deduction.
The court also rejected the insurer’s jurisdictional objection. Both parties were merchants, and Article 37.1 of the insurance services agreement designated Ankara courts as the agreed forum; such an exclusive jurisdiction clause between merchants is valid under Turkish procedural law, making Ankara courts the proper venue regardless of the insurer’s registered seat in Kadıköy/Istanbul. The argument that the insured’s alleged failure to maintain protective devices and alarm systems reduced or extinguished liability was similarly dismissed: the risks said to flow from that failure were expressly among the perils covered by the policy.
Additional grounds raised on appeal — including alleged inconsistencies between expert and court-appointed reports, the appropriate starting date for interest, the applicable rate of interest given the insured’s public-enterprise status, and the applicability of TMSF-related procedural exemptions to the insurer — were all found unmeritorious or inapplicable. The appellate court refunded the appeal filing fee and the advance court-fee paid by the insurer (which is exempt from court charges under Law No. 4758, Article 19/6), and assessed all costs of the appellate stage against the insurer. The decision is final by operation of HMK Article 362/1(a) given the monetary amount at issue.
Key Takeaways
- A policy clause requiring the insurer to pay “the full invoice amount” for partial losses not exceeding the insured sum is a valid contractual waiver of the underinsurance proportional-reduction rule; the insurer cannot later invoke underinsurance to reduce its payout on those partial claims.
- Technical specifications annexed to an insurance services contract and expressly incorporated into the policy have the same binding force as the policy itself; standard-form terms in the specs cannot be overridden by the insurer’s post-loss underinsurance assertions.
- An exclusive jurisdiction clause designating a specific court is enforceable between merchants even when the insurer’s registered office is in a different city; the defendant’s domicile is not the controlling factor where a valid merchant-to-merchant forum-selection agreement exists.
- Covered perils include the risks the parties agreed to insure; an insurer cannot escape liability by pointing to the insured’s alleged failure to take protective measures when the damage falls squarely within the enumerated insured events.
Why It Matters
This decision reinforces that Turkish courts will give full effect to bespoke contractual modifications of the default underinsurance rules found in the Turkish Commercial Code. Insurers who draft or accept technical specifications containing a “full invoice payment” clause for partial losses cannot later invoke statutory underinsurance proportionality to reduce their obligations, even where the declared value is demonstrably lower than the asset’s actual replacement cost. The ruling will be of direct relevance to public-sector procurement of property and equipment insurance, where technical specifications routinely form part of the tender documentation and the resulting contract.
The case also illustrates the significance of forum-selection clauses in commercial insurance contracts. Where both parties are merchants, an agreed-jurisdiction clause will be upheld without reference to general venue rules, providing predictability for institutional policyholders who operate assets across multiple provinces but centralise their legal disputes in a single city. The finality of the appellate ruling (no further ordinary appeal available on this quantum) means the insured secures immediate enforceability.