Sued for a staggering R78 billion, MTN turns to the Constitutional Court

Africa’s largest mobile network operator, MTN, is appealing a decision made by the South African Supreme Court of Appeal in the $4.2 billion (R78-billion at the time the legal battle began) by Turkish telecommunications and technology services provider, Turkcell.

The Supreme Court of Appeal recently upheld “aspects of the legal appeal” brought by Turkcell.

Turkcell is accusing MTN of being awarded a multi-billion-dollar GSM telecom license in Iran irregularly.

MTN has previously denied this, supported by an independent forensic report by the Hoffman report.

However, 12 years later, MTN and Turkcell are still fighting over whether South African courts have jurisdiction to hear the case.

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MTN approaches the Constitutional Court

The MTN Group has confirmed to The Citizen that it is appealing the SCA decision. However, the decision does not concern the merits or allegations of the case, but rather whether South African courts have jurisdiction in the matter.

“MTN Group confirms that it submitted its notice of intention to appeal the recent decision of the South African Supreme Court of Appeal in the matter brought by Turkcell,” the Group told The Citizen.

MTN Group stated, “The appeal was lodged against a High Court judgment, in which the High Court had dismissed Turkcell’s case against MTN Group on the basis that the South African courts did not have jurisdiction.

“The SCA has set aside the judgment and decided that the South African courts do have jurisdiction. The SCA, however, upheld the High Court ruling that Iranian law is applicable to key aspects of the dispute.”

MTN confident it will win

“The decision to uphold the appeal does not relate to the merits of Turkcell’s claims or the allegations made against the Group, which have not yet been tested in court.

“MTN has always maintained that the Turkcell litigation was without merit and has expressed confidence that it would successfully defend these proceedings,” added the Group.

In response to The Citizen, the Group further said, “MTN maintains that, while it agrees that Iranian law governs the underlying dispute, the allegations raised by Turkcell should be adjudicated in the courts of Iran, which are the appropriate and competent forum for this matter.”

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Was anyone bribed?

The legal battle between MTN and Turkcell began in 2013, when the Turkish telecommunications company accused MTN of bribing Iranian and South African officials to secure a multi-billion-dollar GSM telecom license in Iran.

Cedric Soule, global counsel for Turkcell, stated that the license was initially awarded to the Turkish telecommunications company, but it was subsequently overturned in 2005.

Former Chairman of the Group Phuthuma Nhleko and director Irene Charnley have also been accused of being influential figures who were closely involved in the deal.

Tactic to delay the trial

“This is the latest attempt by MTN and the other defendants to delay the trial. The SCA clearly decided that South African courts have jurisdiction in this matter and unequivocally rejected all the objections raised by MTN,” added Soule.

“We remain confident that when the full evidence is presented at trial, it will demonstrate that MTN engaged in corrupt practices to secure the Iranian licence initially awarded to Turkcell.”

Turkcell believes the Constitutional Court should decline to hear the appeal filed by MTN and the other defendants.

“The SCA’s decision represents a significant victory for the principle that South African companies should be held accountable in South Africa for their conduct abroad.”

Hoffmann report

“After twelve years of procedural delays, Turkcell looks forward to the opportunity to present its evidence in court and seek appropriate redress for the more than $4.2 billion in damages suffered due to MTN’s alleged misconduct,” said Soule.

In 2013, the Hoffmann report found that the license to MTN was awarded lawfully, clearing the group of any wrongdoing. 

The Committee, which compiled the report, was appointed by MTN in 2012. It was found that two statements by Kilowan “shown to be a fantasist and a conspiracy theorist”.

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