Turkcell’s $4.2 Billion Lawsuit Against MTN Group

Turkcell, the biggest Turkish mobile network operator, has taken its $4.2 billion lawsuit against MTN Group to the South African court.

For more than 10 years Turkcell has alleged that MTN had been unlawfully awarded a tender to provide telecommunication services in Iran. Apparently, Turkcell had been named the winning bidder in February 2004 and MTN had come second. However, the decision was reversed in 2005 and since then MTN has operated in Iran as the second mobile network operator, MTN Irancell.

Turkcell originally pursued the case against MTN in the United States in 2012 but dropped it in May 2013. The reason behind dropping the case was that simply U.S. Supreme Court had no jurisdiction in the disputed case. So Turkcell filed a lawsuit against MTN Group at the South Gauteng High Court in Johannesburg to pursue the lawsuit in a court that has jurisdiction over this matter. Turkcell accuses Africa’s largest mobile operator of corrupt acts, including promises of bribes and the giving of gifts to Iranian and South African government officials to secure the license. Turkcell also alleges that MTN promised to influence the South African government’s vote at the International Atomic Energy Agency (IAEA) on Iran’s nuclear program in 2005 and 2006, according to Reuters. But considering the fact that Turkcell is no stranger to long lasting lawsuits and the fact that Turkcell itself is subjected to a decade-long struggle between three of its shareholders, the alleged claims remain unproven.

Turkcell’s claim was delayed by objections from MTN and Turkcell’s responses to the objections. On May 5 a South African high court rejected another 30 objections from MTN, clearing the way for the case to go to trial. “We are delighted that the case is finally coming to trial in South Africa. Turkcell will be seeking the earliest possible trial date and looks forward to vindicating its claims before the South African courts,” said Serhat Demir, the Turkcell vice president.

“Recent developments in the matter were procedural in nature and had nothing to do with the merits of the case and MTN continues to believe that there is no legal merit to Turkcell’s claim and will accordingly oppose it,” MTN said in a statement.

Iran is the third-largest market for MTN. Until the recent lifting of international sanctions against Tehran this South African company had been struggling to repatriate around $1 billion in accumulated dividends from its 49 percent stake in Irancell.