Legal blow to MTN

South Africa’s Supreme Court of Appeal has handed down judgment for MTN in the company’s case with Turkish mobile operator Turkcell.

The case dates back to 2013, when Turkcell Iletisim Hizmetleri and its wholly owned subsidiary, East Asian Consortium (EAC), instituted legal action in the High Court of South Africa against MTN and some of its subsidiaries.

Turkcell and EAC sought substantial damages from MTN, alleging impropriety in the award of the first private mobile telecommunications licence in the Islamic Republic of Iran in 2004.

Specifically, the Turkish giant accused MTN of bribing Iranian government officials to win a substantial stake in the license.

Therefore, it took the matter to the High Court in 2013, asking the court to award an estimated $4.2 billion (approximately R78 billion) in damages for lost business, revenue, and profits.

In 2012, MTN’s board appointed an independent special committee to investigate Turkcell’s allegations. The committee found no evidence of Turkcell’s allegations and exonerated MTN. 

Ten years later, in 2022, the High Court ruled in MTN’s favour, with the matter coming down to jurisdiction.

The High Court dismissed Turkcell’s case against MTN with costs on the basis that the South African courts did not have jurisdiction. Turkcell appealed this ruling at the Supreme Court of Appeal. 

MTN informed shareholders on Wednesday, 30 April, that the Supreme Court of Appeal set aside the High Court’s judgement and decided that the South African courts do have jurisdiction.

However, it upheld the High Court ruling that Iranian law applies to key aspects of the dispute.

“The decision to uphold the appeal does not relate to the merits of Turkcell’s claims or the allegations made against MTN Group, which have not yet been tested in court,” MTN said. 

“MTN has always maintained that the Turkcell litigation was without merit and has expressed confidence that it would successfully defend these proceedings.”

Africa’s largest mobile operator said it intends to approach the Constitutional Court to appeal this decision.