MTN faces $4.2bn high court claim from Turkcell

3 Jun 2017

MTN faces a $4.2bn high court claim from Turkcell in the latest chapter of a long-running legal dispute over the South African group's Iranian mobile network operator licence.

MTN faces $4.2bn high court claim from Turkcell

Turkcell originally filed its lawsuit against MTN in the US in 2012 but withdrew the case after the US supreme court ruled in a separate case that US courts do not have jurisdiction in cases involving corporations which are not domiciled in the US and which are involved in disputes in foreign countries.

In 2013 it lodged its lawsuit in the South Gauteng high court.

Bribing officials

Turkcell is accusing MTN of corruption by bribing officials, arranging meetings between Iranian and South African leaders, and promising Iran weapons and UN votes in exchange for a licence to provide cellphone services in Iran.

MTN owns a 49% stake in Iran's mobile network operator, Irancell. Iran Electronic Development Company owns the remaining 51%. Turkcell said it was initially awarded the licence, which was then given to MTN in 2005.

Turkcell says its lawsuit has been delayed by objections from MTN and amended particulars of claim by Turkcell as it sought to accommodate these objections. On 5 May 2017, the high court rejected nearly 30 further objections from MTN, clearing the way for Turkcell's amended particulars of claim to go to trial in SA.

MTN's failure to appeal

MTN had until 30 May 2017 to apply for leave to appeal against the judgment by Judge EJ Francis, but did not do so.

"We are delighted that the case is finally coming to trial in SA," said Serhat Demir, legal and regulation executive vice-president of Turkcell. "We believe we have a very strong claim. The South African courts will be able to evaluate the huge amount of evidence we have to support our claim that MTN went to extraordinary lengths to unlawfully take Turkcell's rights to the Iranian GSM licence."

Also claiming interest

The $4.2bn claim against MTN is calculated from the profits Turkcell says it would have made had it operated the Irancell licence it was lawfully awarded. Turkcell is also claiming interest on that amount, from 2005.

According to Turkcell, MTN has 20 days to answer Turkcell's particulars of claim, after which the matter will move towards discovery and a trial date will be set.

Said Demir: "Turkcell will be seeking the earliest possible trial date, and looks forward to vindicating its claims before the South African courts."

Source: BDpro

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