In general
There are certain limitations to freedom of contract. Under national laws, these limitations appear as mandatory rules based on public policy. Similarly, under international law, even if the parties have made a choice of law, in case there are overriding mandatory rules, these rules shall apply despite the choice of law. In this Newsletter article, overriding mandatory rules shall be assessed especially within the framework of Article 31 of Act No. 5718 on Private International and Procedure Law (“MOHUK”).
Definition and Scope
Overriding mandatory rules can be defined as mandatory rules that are crucial for the countries’ economic, social and political purposes, and their applications are required for the disputes within their scope in order to implement the above-mentioned purposes[2]. However, when an overriding mandatory rule is concerned, such rule shall absolutely be applied, regardless of the results; whereas, the results are taken into consideration for the implementation of public policy. In other words, when a foreign law is applicable in a given case, public policy shall only intervene if a result arises that would be unacceptable within the framework of the national laws[4].
The second condition within this framework is the concept of the close connection between the third country’s law and the given case. Since there is no clarity for the cases of close connection, the court’s discretion shall be applied[6]. As per Article 9/1 of the Rome I Regulation, overriding mandatory rules are “provisions, the respect for which is regarded as crucial by a country for safeguarding its public interests, such as its political, social or economic organization, to such an extent that they are applicable to any situation falling within their scope, irrespective of the law otherwise applicable to the contract.”
Conclusion
As stated above, mandatory rules are the general provisions that limit the freedom of contract. Their appearing in international law is due to national laws. Within this framework, it should be noted that there are several opinions on the differences between the mandatory rule notion and their applications amongst scholars. This Newsletter article brings attention to the overriding mandatory rules within the framework of Article 31 of MOHUK.
