MTN asserts that South African courts lack jurisdiction over Turkcell's bribery allegations
Image: Graphic/Se-Anne Rall
Africa’s largest mobile network operator, MTN, is convinced that South African courts have no jurisdiction to hear a matter involving alleged corruption in Iran, and that the issue should be dealt with in the Middle Eastern country.
This follows a landmark judgement earlier this month in the Supreme Court of Appeal (SCA) that made it possible for mobile rival and accuser Turkcell to present evidence that it believes shows that MTN committed acts of bribery and corruption to overturn the award of an Iranian GSM licence to Turkcell.
The SCA ruling set a precedent in that it was the first time a South African court had been asked to determine whether allegations of misconduct that apparently took place in another country could be heard locally.
MTN has now taken the issue on review to the Constitutional Court and, should MTN fail in its bid, Turkcell can take its allegations of bribery to the Gauteng High Court, Johannesburg. The Turkish operator lost its bid for that to happen two years ago, with a finding then by the same High Court that South Africa was not the correct geography to hear the matter – which is the decision that has been overturned through the SCA ruling.
Turkcell’s legal wrangle with MTN dates back more than a decade when it initially approached the US courts in an action it later retracted, contending that MTN won its 49% of a telecommunications licence in Iran through paying bribes.
MTN argues, in its Wednesday appeal filing to have the SCA’s decision overturned, that Turkcell’s allegations should be adjudicated in Iran’s courts, which are the appropriate and competent forum for this matter.
Joining MTN in taking the matter to the top court in the country are former employees, Phuthuma Nhleko and Irene Charnley.
Turkcell doesn’t think the apex court should hear the matter, as it said on Thursday that the “SCA’s majority judgment was well-reasoned and correctly applied the established legal principles regarding jurisdiction that MTN and the other defendants invoked to seek to delay the trial”.
The Turkish operator argues that MTN paid off both Iranian and South African officials to overturn a public tender, which it lost to Turkcell, for a multi-billion-dollar opportunity to run an Iranian GSM telecom licence. “This case has significant implications for South Africa's stance on international bribery and corruption,” it said in a statement on Thursday morning.
Cedric Soule, counsel at King & Spalding and global counsel for Turkcell, alleges that MTN’s actions caused it more than $4.2 billion, worth R75.3bn at the time, in damages, which it seeks to recoup as it claims these are lost profits.
“MTN denies the allegations made by Turkcell. These claims were the subject of a comprehensive and independent investigation led by Lord Hoffmann, the findings of which did not support the allegations,” the operator said in a statement it provided to IOL on Thursday in response to a query.
In 2012, the UK’s Lord Leonard Hoffmann released a report that exonerated MTN of any shady dealings in securing the licence. In part, the report stated: “All the allegations are a fabric of lies, distortions and inventions.” This report also cleared Charnley, then VP for the Middle East and North and East Africa, and Nhleko, who was then CEO, of any wrongdoing.
“MTN remains committed to operating with integrity, transparency, and full compliance with applicable laws. The Group continues to respect the legal process and will pursue all appropriate avenues to defend its position,” it said.