A Johannesburg high court will investigate a damages claim for $4.2 billion raised in 2013 by Turkcell against South African operator MTN.
Turkcell is alleging that MTN committed “unlawful acts” when the firms were competing for a licence tender in Iran. The Turkish operator claims that it was awarded Iran’s first private mobile licence in 2004, but that “MTN’s illegal acts, including bribery and corruption” meant that it was “unlawfully” denied the licence.
The sum that Turkcell has specified constitutes the profits that it would have made (plus interest) had it retained the licence. The case has in limbo until a judge in South Africa’s high court ruled that it could go to trial, with Turkcell stating that “South African high court rejected [the] defendant’s procedural objections. Thereby, after a long period of time, merits of the case will now be examined.”
Serhat Demir, Turkcell’s EVP for legal and regulatory affairs, said: “We believe we have a very strong claim… Turkcell will be seeking the earliest possible trial date, and looks forward to vindicating its claims before the South African courts.”
MTN reiterated its statement from 2013 that it “continues to believe that there is no legal merit to Turkcell’s claim and will accordingly oppose it.”
Although MTN registered its first ever annual loss in March, it is doing well in Iran, which is its second largest market. MTN Group has begun repatriating funds from MTN Irancell, in which it holds a 49% stake, after the easing of sanctions against Iran. This will allow the group to receive around $1 billion in loan repayments and accumulated dividends from the Iranian operator.