Mining Companies in Türkiye May Increasingly Face Compensation Claims Due to A Constitutional Court Judgment

The Turkish Constitutional Court recently ruled on a case involving compensation claims arising from property damage caused by mining activities. In the judgment by its Grand Chamber, the Constitutional Court found violations of (i) the right to property and (ii) the right to an effective remedy while also signaling the necessity for a legislative amendment in the compensation regime in related cases.

Facts of the Case

The applicant owns a plot of land with a two-story building in Türkiye’s Zonguldak region, where coal production has been one of the primary industries dating back to the 19th century. In recent years, the applicant’s property was severely damaged and became inutile due to mining activity allegedly conducted by the Turkish Hard Coal Authority and a private mining company. As a result, the applicant initiated a compensation lawsuit against the two entities.

In the lawsuit, an expert appointed by the instance court reported that the property was indeed completely unusable, and 15% of the damage was caused by defective construction, while 85% was caused by subsidence, sinking of the building to a lower level due to mining activities.

While the expert report established the cause of property damage to be mining activities, the instance court dismissed the lawsuit by referring to a law that regulates the acquisition of immovable property in coal fields (Law no. 3303) and blocks any possibility of compensation claims.

The applicant then took the case to the Court of Cassation, but his appeal was rejected on the same grounds. Following this, he filed an individual application before the Turkish Constitutional Court.

The Constitutional Court’s Assessment

In its assessment, the Constitutional Court highlighted that the state has positive obligations under the right to property and such obligations require, inter alia, the establishment of judicial and administrative remedial mechanisms in cases where a property owner suffers damages. To this end, the Court stressed the lack of an effective remedy in the applicant’s case due to Law No. 3303’s strict wording that prohibits any compensation claims.

Moreover, while the state has the right to issue permits for mining activities as per Article 168 of the Constitution, it also has an obligation to prevent undue interference with the property rights of local residents – a delicate balance must be struck between the two. However, in the case before the Court, the balance was tipped towards the former.

In this respect, the Constitutional Court noted the expert report, which confirmed that 85% of the property damage was caused by the subsidence resulting from mining activities. Still, the courts had categorically rejected the applicant’s lawsuit without evaluating the defendant’s faults or assessing the merits of the case.

Based on this, the Constitutional Court concluded that the applicant’s right to property had been violated in conjunction with his right to an effective remedy while highlighting that the violation did not result from inaccurate legal evaluations of domestic courts but directly from a piece of legislation, Article 3 of Law No. 3303.

What Makes this Judgment Significant?

The Grand Chamber of the Constitutional Court unanimously rendered a violation judgment in the Sabri Uhrağ case – this uncontested decision by all its members signals two significant developments in the near future.

First, the legislation that resulted in the violation of the applicant’s rights may be amended soon. The Constitutional Court sent the judgment to the Turkish Parliament and left it to the discretion of the legislative body to amend the law in accordance with international standards and the right to property. However, it is not possible to estimate when such an amendment may take place, if at all.

Nonetheless, even in the absence of any legislative motivation for the amendment, the said provision, its unconstitutional character having been confirmed in the instant case, may be annulled by the Constitutional Court as per Article 152 of the Constitution if its constitutionality is challenged by an instance court in a similar case.

Secondly, the imminent amendment or annulment of the said provision may present an opportunity for a large number of people who have suffered similar property damage to demand compensation from the administrative authorities or private mining companies.

In light of this, mining companies operating in Türkiye face clear litigation risk resulting from the effects of the Constitutional Court’s judgment. They are advised to conduct proper due diligence in their operations to prevent legal liability.