US court jurisdiction questioned in MTN/TurkCell dispute

TurkCell’s intention to bring bribery claims against MTN (MTN) before a US court is questionable, according to the legal advice given to the SA mobile operator.

TurkCell confirmed that talks with South African mobile operator MTN are ongoing, with the former looking to bring a case against MTN and its subsidiary, Irancell, in a US court.

MTN, which owns 49% of Irancell – the group that was awarded the Iranian GSM licence – said last Thursday (2 February 2012) that it had been informed by TurkCell that it believes it has a claim against MTN and its relevant subsidiary.

This is arising out of the award of the second GSM Licence based on alleged violations of US laws, and TurkCell has indicated an intention to bring such a claim before a US court.

According to MTN, TurkCell claimed that it had asked South Africa to support Iran’s nuclear development in return for a license.

Turkcell however, would not comment on any of the legal action MTN referred to last week.

MTN hosted a management conference call for investors and analysts, and suggested that jurisdiction of a US court over a potential claim is questionable.

An analyst who took part in the conference call said that the potential claim is understood to be against MTN Group and not MTN Irancell.

MTN has appointed a special committee to assess the potential TurkCell claim, headed by Lord Hoffmann. The analyst suggested the committee could take up to 4/5 months to finalise and present its findings.

He said that on the question of the potential lack of jurisdiction, a US Court would have to hear the potential claim.

According to legal advice MTN has received, however, MTN management suggested that this was an area where it was actively seeking further advice, and looking at precedent legal actions.

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US court jurisdiction questioned in MTN/TurkCell dispute