MTN Group to fight Turkcell in USD4.2 billion law suit

MTN Group to fight Turkcell in USD4.2 billion law suit

South Africa’s MTN Group said it is ready to slug it out in court with Turkcell on the latter’s USD4.2 billion claim over an Iran license deal that went sour.

The group said Turkcell legal suit is ‘baseless’ and ‘opportunistic’ after it filed its defence.

Explaining the matter further, MTN Group said Turkcell is Turkcell is claiming damages against MTN as a result of MTN having acquired a 49% interest in Irancell Communication Services Company (“Irancell”), which was awarded the second GSM License in Iran in November 2005.

MTN remains of the view that:

  • Turkcell’s claim is opportunistic, an abuse of the process of Court, baseless and without merit – we will not be bullied, harassed and oppressed in this matter and have every expectation that we will prevail;
  • Turkcell was the author of its own misfortune in failing to obtain the licence in Iran;
    When it became clear that Turkcell was unwilling or unable to comply with the new legislative requirement that its shareholding in the licence be not greater than 49%, the Iranian authorities offered the opportunity to MTN, which it accepted;
  • Turkcell obviously regretted their decision and has ever since engaged in four different sets of legal proceedings, all of which have been lost;
  • Turkcell’s implausible allegations rest heavily on a disgruntled former MTN employee who has been described as a fantasist and a conspiracy theorist and whose allegations have been dismissed by an independent investigation as being a fabric of lies, distortions and inventions.

When the allegations made by Turkcell were first raised, MTN appointed an Independent Special Committee under the Chairmanship of the eminent international jurist, Lord Leonard Hoffmann, to investigate the allegations. Lord Hoffmann embarked upon a thorough and exhaustive analysis of the investigations.

When furnishing his comprehensive Report into his findings, Lord Hoffmann made the point that his Committee had ‘received full cooperation from the company and had been given unrestricted access to all individuals, information, documents and facilities’ which his Committee requested.

He also observed that there had ‘not been the slightest attempt by the company or its management to influence the Committee in its deliberations or Report’.

He found that Turkcell’s allegations, which rested entirely upon the evidence of one Mr Christian Kilowan, were all ‘a fabric of lies, distortions and inventions’; and that Mr Kilowan was shown to be ‘a fantasist and a conspiracy theorist’.

Lord Hoffmann was also very clear in finding that he was entirely satisfied that there was no conspiracy between MTN and Iranian officials to remove Turkcell from the licence process in Iran, that there were no promises made to procure the South African government to supply defence equipment to Iran or to support Iran’s nuclear policy, nor that MTN had advanced sham loans to its Iranian partners, nor indeed that any promises of payment to Iranian or South African officials were made or authorised by Mr Nhleko or Ms Charnley.

In the period since Lord Hoffmann made his Report, we have found nothing that would change his findings.

Indeed, earlier this year, Dr Mahmoud Vaezi, the Minister in Iran’s Ministry of Information and Communication Technology, also rejected Turkcell’s allegations in an exclusive interview with Islamic Republic of Iran News Agency. Minister Vaezi was reported to have said that all relevant documents have been looked at, with nothing to establish Turkcell’s claims.

The case in South Africa is the fifth time that Turkcell has attempted to pursue legal proceedings in respect of substantially the same issues.

Turkcell continues to pursue its claims only to harass and oppress MTN.

We consider that it is most unjust to burden MTN with a fifth round of litigation of substantially the same matters.

Turkcell’s four previous attempts, including proceedings before reputable international arbitration panels, failed. The ongoing attempt to re-litigate complaints that Turkcell have repeatedly litigated without success are contrary to the interests of justice. To the extent that Turkcell may contend that any new issues have been raised in their summons, these issues were considered and disposed of in the Hoffmann Report.

We have every confidence that this fifth ‘bite at the cherry’ will also fail.

The claim smacks of a desperate last measure to try and extract benefits to which it is not entitled, the group said.