MTN vs Turkcell: $4.2bn Bribery Lawsuit Heads to South Africa’s Constitutional Court
The long-running legal battle between MTN Group and Turkish telecom rival Turkcell is escalating to South Africa’s highest judicial authority, the Constitutional Court. This follows a Supreme Court of Appeal ruling that upheld certain aspects of Turkcell’s appeal while MTN has vowed to challenge the decision.
Background of the Dispute
The case stems from allegations surrounding the 2005 licensing process for MTN Irancell, where MTN holds a 49% stake. Turkcell alleges the license was awarded through improper means, a claim MTN has consistently denied. A 2012 investigative committee cleared MTN of any wrongdoing in Iran.
“Turkcell claimed it lost out to MTN after the latter paid bribes and other inducements to secure the stake”
The Supreme Court of Appeal ruled that South African courts do have jurisdiction over the case, though it maintained that Iranian law applies to key aspects of the dispute. Importantly, the court emphasized this decision doesn’t address the merits of Turkcell’s claims.
The $4.2 Billion Allegations
Turkcell initially filed its lawsuit in November 2013, seeking $4.2 billion (R78 billion) in damages. The Turkish company alleges MTN secured the Irancell license through bribery and other improper inducements. The lawsuit also targets former MTN executives Phuthuma Nhleko and Irene Charnley, both of whom deny the allegations.
Previous Investigations
The 2013 Hoffmann Committee, chaired by British jurist Leonard Hoffmann, thoroughly investigated the claims and found no evidence of wrongdoing by MTN. The committee described Turkcell’s allegations as a “fabric of lies, distortions and inventions” and specifically cleared MTN executives of authorizing any improper payments.
As the case moves to the Constitutional Court, MTN maintains its position that the litigation is without merit and expresses confidence in its ability to successfully defend against the claims.
Source: TechCentral
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