MTN will vigorously defend against Turkcell lawsuit

MTN Group says it will vigorously defend against the Turkcell lawsuit – the Turkish operator‘s fifth claim arising from the unsuccessful bid to obtain a mobile licence in Iran.

Turkcell on Tuesday (26 November) filed papers with the South Gauteng High Court in Johannesburg, seeking $4.2 billion in damages, alleging it was the victim of corruption and bribery that caused it to lose a contract in Iran.

“Like the four previous cases, this matter emanates from Turkcell’s alleged grievances arising from its unsuccessful bid to obtain a mobile licence in Iran, and the award of that licence to Irancell.

“While the summons has not yet been served on it, MTN understands that the claim is now made against MTN, its wholly owned subsidiary, MTN International (Mauritius) Limited (MTNI) and others, in which Turkcell claims an amount of some US$4.2 billion, plus interest and legal costs,” MTN said in a statement.

The SA operator noted that by way of background, three of the suits brought by Turkcell and its subsidiary, East Asian Consortium (EAC) had already been dismissed, including one against MTN and MTNI.

It said that in late 2005, EAC was unsuccessful in its bid before the Iranian Court to restrain the Iranian Ministry of Telecommunications from committing what the EAC alleged were breaches of certain statutory requirements and agreements.

This was followed by arbitration in 2008 against the Iran government under the Turkey-Iran Bilateral Investment Treaty, which has not yet been decided.

Also in 2008, MTN said that EAC commenced an arbitration under the rules of the International Chamber of Commerce (ICC) against Iran Electronic Development Company for alleged breach of a shareholder’s agreement concluded between the parties in 2004.

The ICC Tribunal dismissed Turkcell’s claims in a final award in April 2012.

Turkcell then filed a suit against MTN in the USA in March 2012, accusing the company of bribery and other acts of corruption that it said caused it to lose out on the license to operate a mobile network in Iran.

“MTN’s belief was that it was entirely inappropriate and opportunistic for Turkcell to invoke the Alien Tort Statute to bring a commercial dispute between a Turkish company and a South African company before a US court. ”

“The 1789 law, usually cited in human rights and torture cases, gives US courts’ jurisdiction in some instances to consider claims by foreigners for illegal conduct that occurred in another country,” MTN’s statement said.

Turkcell’s US suit was dismissed in May this year, after a US Supreme Court ruling on another case significantly curtailed the reach and ambit of the Alien Tort Statute.

“The lawsuit now launched in South Africa is the fifth, and is premised on substantially the same unfounded allegations which were made in the US proceedings.

“As MTN, we view this as nothing but a spurious attempt to claim monies to which Turkcell is not entitled.

“MTN maintains that it did not cause Turkcell to lose out on its obtaining a mobile licence in Iran, as has been claimed by Turkcell.  Its inability to procure the licence was as a result of its own failings, and not because of any impropriety by MTN (which is strongly denied),” MTN said.

In February 2012, the MTN Group Board commissioned Lord Hoffmann to head an independent Committee to investigate the allegations made by Turkcell in the legal case brought against MTN in the United States.

The Hoffmann Committee cleared MTN of the bribery allegations.

More on MTN and Turkcell

Turkcell sues MTN for R43-billion over Iran damages

Turkcell withdraws MTN lawsuit

US senator alerts MTN case to treasury

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MTN will vigorously defend against Turkcell lawsuit