Turkcell (NYSE: TKC) (BIST: TCELL) received a decision from the South Gauteng High Court of South Africa stating that Iranian law should be applied to the merits of the dispute and that the Iranian courts have jurisdiction and not the South African courts. Turkcell intends to appeal this decision.
“We are surprised and disappointed with the Court’s decision preventing a South African company’s illegal acts to be subjected to a trial in South Africa” said Serhat Demir, Vice President of Legal and Regulation of Turkcell. He added “We are of the opinion that, in the lawsuit, which has been ongoing for almost 10 years regarding the damage caused by MTN by changing the outcome of the tender through bribery and corruption and by illegally interfering license agreement signed with Iran, South African law should be applied and the South African courts should also have jurisdiction over the matter. South Africa is where MTN's headquarter is located and where unlawful acts were planned and took place.”
Serhat Demir also indicated that; as the judicial body of a democratic country, South African Court identifying the dispute as arising from the acts of foreign countries and its decision that Iranian courts have competence can be criticized in respect to the effectiveness of South African judiciary system and bears the risk of excluding illegal acts that take place in South Africa from judicial review. In this respect, he expressed that this decision would damage the trust in South Africa’s independent judiciary system and would have an adverse effect on the foreign investors of South African companies, and he is hopeful for the reverse of this decision.
About Turkcell’s lawsuit against MTN
On 26 November 2013, Turkcell announced that the Company filed a lawsuit before the South Gauteng High Court of South Africa in Johannesburg against, South African mobile operator MTN and its group companies, as well as former company executives, demanding compensation for the damages incurred by Turkcell during the GSM tender process in Iran. In the lawsuit, which was prolonged as a result of various procedural objections by the defendants, the initial objections of the defendants were rejected and on 1 June 2017, it was announced that the lawsuit was going to be examined on the merits.
After the interim hearing on the separated issues, the Court in its latest decision, evaluated the objection made by the defendants regarding the jurisdiction and determination of the applicable law, and decided that Iranian law should be applied to the merits of the dispute and that the Iranian courts have jurisdiction and not the South African courts. This is on the ground that the acts of foreign states cannot be subjected to a trial in South Africa.
Turkcell will continue to enforce all its legal rights against this decision including an appeal of the decision and will strongly and decisively continue to defend its rights for both compensation of the damages incurred and also to ensure that the relevant executives of MTN are held accountable and punished for their acts of corruption and bribery which will emerge into the daylight as a result the investigations being conducted by South African authorities.
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