Just a note that I think it might be the councils, Fethiye vs Muğla rather than the government, that information doesn't seem clear yet. It went to court and this is how the court decided. That said, from what else I have read the court case was in Ankara so maybe it was the government!
It's an odd one. It'll all depend on who they actually entered into the lease with.
You'd think it was the municipality who has responsibility but I think Olu beach is controlled by the Ministry of Culture and Tourism. If the bar is on land owned by the ministry then as they're based in Ankara that's where they'd probably raise an action, more chance of success there as well.
Signs of things to come I reckon - ministry signs contract with two individuals, they make a go of the business, ministry thinks "we can do that" and goes to court to effectively renege on the deal. The judiciary are all in the pocket of the AKP so pretty much foregone conclusion the ministry would win.
A pretty disgusting double cross by civil servants who couldn't run to the toilet never mind run a bar and restaurant.
Suspect it'll end up back on the market for offers to lease...
JF