Turkcell takes MTN to SA court

TURKCELL is calling on the South Gauteng High Court to make MTN answer for its alleged misdeeds in Iran.

Last year, Turkey’s largest cellphone company hauled its South African rival to a US court for alleged bribery, which it claimed cost Turkcell a licence in Iran. MTN, it said, exercised undue influence on South African and Iranian government officials.

Turkcell claimed MTN had also splurged on gifts and fivestar accommodation for Iranian officials to persuade them to scupper their government's contract with Turkcell.

In April, the US Supreme Court effectively made it impossible for the US case to go ahead, ruling that the Alien Tort Statute could be used only in a very narrow set of circumstances.

Six months later, Turkcell has now filed its case in a South African court, and is demanding damages of nearly $4.2-billion for ‘‘loss of business opportunities, turnover and profits” relating to the Iranian licence, according to the summons seen by Business Times.

It chose Johannesburg because most of the defendants — MTN, former CEO Phuthuma Nhleko and another executive Irene Charnley — live there, according to Eric van den Berg, Turkcell’s lawyer.

‘‘Other litigation which Turkcell … embarked on in Iran was stymied by the courts there.”

If the case proceeds, it promises to be a bruising battle as both sides have retained very skilled legal teams.

Van den Berg, a litigation and dispute resolution expert from Fasken Martineau, will square

❛ Turkcell … is demanding damages of close to $4.2bn

off against MTN’s Nick Alp, a partner at Webber Wentzel. Alp represented Anglo American in a test case brought by a group of former gold miners for damages from inhaling silica dust.

Turkcell’s senior counsel is JPV McNally, who was part of the Pioneer Foods team that successfully headed off a Constitutional Court appeal to certify a class action suit against the bread cartel.

MTN boss Sifiso Dabengwa told Business Times his com- pany viewed the case as ‘‘nothing but a spurious attempt to claim monies to which Turkcell is not entitled”.

‘‘These are manipulative tactics from Turkcell, a disappointed competitor, aimed at inflicting the maximum reputational harm,” he said. ‘‘We will continue to fight these claims, and fully expect them to be dismissed. MTN has always maintained that we will challenge Turkcell’s claims irrespective of where they are brought.”

While the case was on hold in the US, MTN established the Hoffmann committee — made up of retired judge Leonard Hoffmann and two independent nonexecutive directors — to probe Turkcell’s claims.

The probe cleared MTN, and the company uses the 500-page report, available on its website, as defence against Turkcell's claims.

But Van den Berg cast doubt on the report. ‘‘The Hoffmann report is open to criticism, not least because it was an exercise paid for by MTN, and run by the same lawyers who acted for MTN in the US suit,” he said.

‘‘In Turkcell’s view, it was not an independent investigation. The report itself will have no evidential value before the South African courts,” he said.