In its decision, the court ruled that the parties’ one year of post-contractual non-compete clause of the franchising contract was void, based on Article 48 of the Constitution and Articles 19 and 20 of the former Turkish Code of Obligations.
More precisely, the court stated that such a post-contractual non-compete obligation is against the freedom to work protected by Article 48 of the Constitution and the parties cannot agree otherwise in a contract due to the limits on the principle of contractual freedom regulated under Articles 19 and 20 of the former Turkish Code of Obligations. It should be noted that the court considered neither the Block Exemption Communiqué for Vertical Agreements nor the Act on the Protection of Competition in its abovementioned decision.
However, the Court of First Instance resisted with its preliminary decision that includes compensation in favour of the franchisor on the basis that the franchisee violated its commitment of non-competition. The remarkable point is that the defendant has not appealed such resistance of the Court of First Instance and thus the Court of Appeal did not have the possibility to revise its decision. Consequently, unless a similar case is filed and the dispute is taken before the Appellate Court, the above mentioned decision shall be considered as the latest case law upon the matter.
Hikmet Koyuncuoglu , IDI franchising Country Expert for Turkey
