Turkcell's corruption claim against MTN dismissed by South African court

Turkcell's corruption claim against MTN dismissed by South African court

Allegations of impropriety by Turkish operator Turkcell and its subsidiary East Asian Consortium (EAC) against South African operator MTN over the award of the first private mobile telecommunications licence in Iran have been dismissed by the High Court of South Africa.

This judgement brings to an end what South African website TechCentral describes as “a long-running and ugly battle”.

Turkcell originally sued MTN for US$4.2 billion in damages, accusing it of paying bribes to secure an operating licence in Iran in late 2005. MTN won a 49% stake in MTN Irancell.

Local press reports say that Turkcell alleged in its application to that court that MTN had conspired with Iranian officials to oust Turkcell from the successful consortium that bid for the licence and take its place by promising to use its influence with the South African government so it could procure defence equipment and garner support for its nuclear development programme at meetings of the International Atomic Energy Agency.

Turkcell’s early attempts at international arbitration apparently did not work, leading it, over time, to the South African courts. Turkcell first filed papers in the high court in South Africa in November 2013. It also sought damages from former senior MTN employees who were accused of being part of the alleged conspiracy.

An MTN-appointed committee, set up in 2012, and chaired by South African-born former senior British jurist Leonard Hoffmann, found that Turkcell’s allegations were a “fabric of lies, distortions and inventions” and the evidence of Turkcell’s key witness “unreliable”.

Nevertheless, the process continued until Turkcell withdrew as a plaintiff two years ago. Now EAC’s action against MTN has been dismissed with costs, putting an end to the litigation, an outcome with which MTN has, not surprisingly, declared itself delighted.

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