The Constitutional Court Views the Regulation's Restriction of the Rights Given in the Concession Agreement in Favor of the Contracting Firm as an Infringement of Property Rights
The Constitutional Court’s Decision no. 2017/36186 dated 28.12.2022 (Decision) was published in the Official Gazette no. 32168 on 19.04.2023. In the Decision, unilateral changes made with an administrative regulation in the conditions of the concession agreement to which Turkcell is a party, were found to be a violation of the right to property.
In the Decision, it is clearly emphasized that the Turkish Wealth Fund, who owns an important portion of Turkcell shares, is clearly categorized as a public legal entity. The Decision also pointed out that in addition to public legal entities, legal entities affiliated with the public are also subject to the provisions of public law.
The Constitutional Court defined the concept of “legal entities affiliated with the public” as legal entities that exercise public power or that are dependent on public authorities. Having public owner and/or directors appointed by public authorities, having a competitive advantage in the market compared to their competitors, tax exemption, financing of capital from the public, being subject to tender legislation or to the audit by the Court of Accounts and the operational dependency are considered as criteria for determining the dependence on the public authorities. Although not public legal entities, legal entities that fit these criteria are accepted to be subject to public law.
On the other hand, the appointment of managing bodies by public authorities is not considered sufficient in terms of providing the criterion of dependency to the public, but operational dependency is also required.
The Constitutional Court also noted that in concession agreements, the general regulatory acts and individual acts of the administration that may result in financial disadvantages on the concessionaire will constitute an infringement of property right. The administration is only able to take individual and general regulatory acts which might put the concessionaire under financial burden, only if it is expressly prescribed in the relevant legislation. In accordance with this principle, it is underlined that the legal provisions that restrict the right to property should be interpreted narrowly.
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