Turkcell ‘seeks new venue’ to sue MTN

2013-05-05 14:00

Turkcell, the mobile operator that has levelled corruption allegations against MTN, has “temporarily” dropped its $4.35?billion (R39?billion) damages case in the US.

Although the Turkish operator is now officially shopping for a new jurisdiction, MTN has already responded gleefully, saying the case “is now behind us” and dismissing the threat of it being resurrected.

Turkcell announced last week that it has “voluntarily dismissed the matter, based only upon jurisdiction, without prejudice to the merits of the case and to refile the case in another jurisdiction”.

A recent ruling in the US Supreme Court has done serious damage to US courts’ accessibility as forums for international legal disputes – closing a chapter in global legal history and destroying a major weapon in the international human rights arena.

Turkcell’s spokesperson wouldn’t comment on the availability of any other jurisdiction the company could use.

It alleges that MTN bribed both Iranian and South African officials to secure Iran’s first private cellular licence in 2005 – or at least to ensure it was booted off the list of bidders.

The star witness in the Turkcell case is former MTN executive Chris Kilowan, who made shocking allegations about the bribing of diplomatic personnel and the peddling of influence.

A major theme of the allegations is that MTN got South Africa to adopt pro-Iranian stances on Iran’s nuclear programme and supply the internationally isolated country with military equipment.

SA’s ambassador to Iran at the time, Yusuf Saloojee, was allegedly given $200?000 while an Iranian official got $400?000, and the other shareholders in Irancell got “sham loans”, which in effect were also bribes.

MTN set up a committee to investigate the allegations under the direction of Lord Leonard Hoffmann, a well-known international jurist.

In February, the committee reported that Kilowan’s allegations were a “fabric of lies, distortions and inventions”, although these allegations will now probably never get tested in a court.

There is also one conspicuous loose end: Saloojee was suspended from his more recent post as ambassador to Oman after the allegations surfaced, but late last year he was “temporarily” redeployed to that nation while the department of international relations conducts its own investigation.

It is unclear what is to become of him and the investigation, and the department did not respond to questions last week.

MTN now owns 49% of Irancell, an operation that has become its third-largest after South Africa and Nigeria, with 41?million subscribers and about R12.2?billion in revenue last year. Turkcell’s gigantic damage claim is based roughly on MTN’s revenues from Iran up to 2011.

The reason the case needs to find a new venue is the groundbreaking judgment in the so-called Kiobel case in the US this year.

Like the Turkcell case, the Kiobel case exploited the Alien Tort Statute – a 220-year-old piece of US legislation that allows foreign matters involving US companies to be heard in the US.

It has been the basis for the large-scale export of the US class action industry to include especially human rights cases involving multinational companies linked to the US, however tenuously. MTN, for instance, has a stock exchange listing in the US.

The statute was also invoked in the ill-fated apartheid reparations case from South Africa a decade ago.

The Kiobel case involved claims against oil giant Royal Dutch Shell related to its alleged aiding of the Nigerian military in the torture and persecution of activists in the Niger Delta in the 1990s.

The US Supreme Court has now held that extraterritoriality should be limited to cases where there is actually strong involvement by US entities.

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