Case Analysis: Kasımlar Hydroelectric Power Plant (HPP) Case: Contract Interpretation, Causality, Betterment, And Foreign Currency Prohibition

Kasımlar Hydroelectric Power Plant (HPP), that was planned in 2012 amid debates about its potential damage to the environment and tourism economy, continued to remain a topic of discussion even after becoming operational in 2016. After being hit by a severe landslide in 2019, the HPP was able to recover only a small portion of its damages from its insurer Thus, it initiated arbitration proceedings before the Insurance Arbitration Commission for the remaining damages, which amounted to 7.5 million US dollars (USD). The claimant's case involves approximately 3 million USD in 'repair, recovery, and prevention' costs, as well as around 4.5 million USD in lost profits.

The primary reason the insurer rejected this claim was the "repair" costs were intended to correct errors made during the design and construction phases of the power plant, which was essentially serving the purpose of "improving the insured value". Similarly, the recovery and prevention' costs following the